Eidos' Ian Livingstone says that the UK government and the games industry must work together to protect and build the future.
Speaking to GamsIndustry.biz, the industry veteran said that the recent spate of studio closures and staff reductions are not simply a matter of the games industry being hit-driven.
"In the UK it is also a case of the high cost of labour and the UK government's unwillingness to offer subsidies and tax credits," he said.
"The government sees that retail sales of games are increasing and assumes everything is OK - yet if it bothered to look at the charts, it would discover that none of the games in today's top 20 were developed in the UK."
Given the heritage of UK game development, Livingstone views the current situation as a terrible state of affairs and says that the government must act soon.
"Overseas governments and companies have long seen the value in the UK games talent that has resulted in a brain drain and studio sales. However, the UK government has been very slow to support our industry and to realise there are serious threats facing it.
"If it does not act soon it will count the economic cost of the loss of UK studios, the brain drain and the loss of ownership of IP. Rome burns, and all that."
Livingstone also said that there is a skills shortage and that many universities have produced poor quality graduates.
"What industry needs are graduates with specific programming, art and animation or project management skills," he explained.
"As Chair of the Computer Games Forum on behalf of Skillset, I have been working with industry and the universities on an accreditation scheme for computer game courses to produce the graduates that industry needs.
"It is important that universities partner with local development studios to keep up to date on content and technology trends as well as inviting guest lecturers and mentors to teach and inspire their students."
As with the issue of studio closures, Livingstone believes that the UK government has a role to play.
"Again, it is up to the government to put more resource into games education if it wants to continue to reap the rewards of the industry which currently contributes 0.75 per cent of GDP and employs over 22,000 people in the UK and is a net contributor to the UK's balance of payments.
"It is vital that UK industry comes together to articulate what it needs in terms of support and skills and to work closely with government and the education and skills system to protect and build the future. For God's sake, let's not become a work-for-hire nation."
The complete interview with Ian Livingstone can be read here.