TIGA's 5 Point Plan
How to grow the UK independent developer and digital publishing sector in 2012
At TIGA we know what we stand for: developers and digital publishers. We know what we want to achieve: to make the UK the best place in the world to do games business. And we know how to accomplish this: by enabling developers and digital publishers to set up and grow strong, sustainable, independent businesses.
The UK games industry is changing. Many publisher-owned studios are closing down, downsizing or, like Square Enix/Eidos, investing heavily overseas. Traditional work for hire practice is giving way to new business models. Digital distribution is in the ascent. Retail is in decline. Developers have access to more options in terms of platforms, genres and distribution than ever before. There has been a big rise in start-ups - and closures: between 2008 and 2010, 145 games businesses set up, but 131 closed down.
With the rise in both studio start-ups and failures over recent years, the key strategic question facing the UK games industry in 2012 is clear: how do we support the growth and viability of more independent content creators and digital publishers?
At TIGA our mission is to fight for the interest of game developers and digital publishers and to make the UK the best place in the world to do games business. We instinctively understand the needs of indie-developers and digital publishers: TIGA is itself a small business and is run by UK developers and digital publishers for UK developers and digital publishers.
At TIGA we know that the status quo of publisher dominance is coming to an end. TIGA believes that the trend towards digital distribution represents an opportunity for UK developers and digital publishers to reduce their over-dependency on overseas publishers. Given that a fifth of UK developers have worked on a game that has been cancelled before the project was complete - with damaging repercussions for the studios in question - reducing this reliance is vitally important.
TIGA wants to see a flourishing developer and digital publisher sector, with rising numbers of start-ups and growing sustainable studios and declining business mortality rates. If this vision is to be realised we need action on five fronts: counsel, connections, costs, careers, and cash. We intend to take action in each of these sectors.
Many business failures are due to management mistakes. Management weaknesses can be overcome by accessing expert counsel. So during 2012 TIGA intends to provide professional business advice to developers and digital publishers. We will: publish a TIGA Guide to Self-Publishing to help developers set up their own studio and publish a game; introduce a free consultancy service delivered by TIGA board members for new TIGA members; and Patrick O'Luanaigh, CEO of digital publisher nDreams, will now take over as Chairman of TIGA's Self-Publishing Committee to provide information and advice for developers who are focused on self-publishing. TIGA will help developers acquire the skills necessary for digital distribution.
Many of the new studios set up in the UK over the last two years are focused on mobile and tablet platforms, and are making games for the casual market. Studios need opportunities to build connections in order to promote their services and develop new business contacts. TIGA plans to hold events during 2012 focused on mobile and tablet devices, raising finance, and self-publishing; Mike Hawkyard, from 4T2 and chairman of TIGA's Casual Games Committee, will spearhead a conference on casual games; and we will hold our regular industry networking events at the Holyrood and Westminster Parliaments in 2012.
TIGA research shows that two-fifths of developers and digital publishers believe that the cost of game development is holding back their business. TIGA already has dozens of discounts on key industry services, ranging from accountancy and legal services and QA on the one hand, to licenses, recruitment fees, PR and audio services on the other. In 2012 we intend to secure further savings for TIGA members to enhance the competitiveness of our members.
The UK games development sector has an excellent workforce and includes many superbly talented and creative people. However, we also have skill shortages; some developers have difficulty accessing skilled programmers, designers and managers.
The comparative shortage of programmers is partly because the proportion of computer science graduates has fallen by a quarter in recent years. Skill shortages are amplified by a brain drain of talented staff to overseas jurisdictions, particularly Canada, facilitated in part by their tax credits. The UK government could help ease skill shortages by incentivising the study of computer science and by maintaining a flexible migration policy. We need to encourage more students from disciplines such as computer science, mathematics and physics to consider a career in the sector. We also need government to ensure that higher education is adequately funded. The UK currently spends 1.2 per cent of GDP on higher education, compared to 2.7 per cent in the USA. The UK cannot be a knowledge economy on the cheap.
In the meantime, we will publish a new TIGA Guide to Careers in the Games Industry to give students information and encouragement to enter the sector, and we will provide new opportunities for students to showcase their work.
If UK studios are to produce the best quality games then they must access the best possible team members and train them effectively. This means that studios must recruit, reward and train staff effectively. During 2012 TIGA will publish: a TIGA Best Practice Recruitment Guide; our annual comprehensive salary survey in conjunction with HR specialists, Aon-Hewitt; and information on industry expenditure on training. Information of this kind will provide developers and digital publishers with information and benchmarking data, enabling them to minimise skill shortages and skill gaps.
TIGA will also continue to strengthen our industry's links with education providers: universities, colleges and Train2Game. Last year we launched the TIGA Education Matching Service, connecting TIGA's university and college members with guest lecturers from the UK games industry. We will develop this service further in 2012 and organise industry-education events. This will intensify industry-academia links, promote knowledge transfer and enhance the quality of higher education provision, ultimately benefiting students and the wider games industry. Developers and education providers also need to work closely together to continue to further improve the quality of education and training. TIGA will make this happen.
Raising finance is a critical issue for our industry. TIGA research from 2011 showed that over two-fifths of studios have difficulty accessing finance. Too many games businesses struggle to find funds to grow after the earliest, prototype phase. It is hard to raise debt, bond and equity finance because of the high levels of uncertainty about consumer demand and the intangible nature of video game IP. At the same time, games businesses generally have difficulty accessing the few public finance schemes that exist. Poor access to finance is holding back the growth of many games businesses and contributing to the failure of others.
At TIGA we believe that games development and digital publishing is a creative industry with huge economic and educational potential. The UK coalition government recognises the value of the film industry and invests almost £100 million per annum in the sector in the form of a film tax credit and around £30 million in lottery funding; it is time that it appreciates the importance of the UK video games industry and backs the sector. Just as overseas governments in Canada, France, South Korea, the USA and elsewhere invest in their video games industries, so the coalition government should invest in our sector and enable it to compete for investment on a level playing field.
In 2012 TIGA will lead the UK games industry in fighting for the introduction of a well-targeted tax break for games production, with a higher level of tax relief for small studios, in order to reduce the cost of game development and to enable the UK games industry to compete on a level playing field. We will push for the establishment of a Creative Content Fund to provide match funding on a pound for pound basis up to a maximum of £100,000 in order to improve access to finance for small studios.
We will campaign for an extension in the scope of the Small Firms Research & Development Tax Credits to help more indie developers and digital publishers. We will press for tax relief on training, to enable small studios to offset expenditure on training against corporation tax. These measures will provide developers and digital publishers with more money to build and to grow their businesses.
The UK games industry is a success story, but some studios are not sustainable. TIGA has a plan that will make the UK games industry successful, sustainable and realise its potential. TIGA will tackle these issues - counsel, connections, costs, careers and cash - and so support the growth and viability of more independent content creators and digital publishers in 2012. Join us and together we can make this vision a reality.