2017 in Gaming: a VGTR Round-Up
From the £1 million extension of the UK Games Fund to the explosion of controversy around lootboxes in premium titles, 2017 has been a roller coaster of a year for the UK’s video games industry. With the ride nearing its end, we’re taking a look at where next year’s journey could be heading. Please keep your arms and legs inside the carriage until the blog comes to a complete stop.
VGTR and The Budget
November’s Budget had a couple of good signs that the games industry’s being taken seriously. The UK Games Fund,set up to help develop the sector, got a £1 million boost to propel it into 2020. It’s a lot less than some would have argued for, of course, but any push forward is a good sign.
The rise in R&D Tax Credits to 12% is another small step in the right direction. It applies to the RDEC system, meaning it’s aimed primarily at larger businesses, but smaller developers subcontracted to do R&D work could still be among those who benefit.
The £84 million devoted to bulking up computer science skills in teaching is a strong move toward investing in gaming’s future. Incentives for maths study and the £500 million investment pledge for broadband, 5G and artificial intelligence could all lead to knock-on benefits as well.
Industrial Strategy white paper
On the 27th of November, the government published its plan to boost the UK’s productivity, which has taken kind of a battering recently. It broke down the strategy’s foundations like this:
1. Ideas: the world’s most innovative economy.
2. People: good jobs and greater earning power for all.
3. Infrastructure: a major upgrade to the UK’s infrastructure.
4. Business environment: the best place to start and grow a business.
5. Places: prosperous communities across the UK.
Specific commitments that could impact the video games industry include investment into virtual and augmented reality technologies, research partnership support between universities and creative businesses and a new Creative Industries Policy and Evidence Centre.
Industry growth and VGTR
The government’s figures put the value of UK creative industries at £92 billion – more than 5% of the economy’s Gross Value Added total. A large part of this push comes down to video games and computer services, which grew 11.4% in 2015-16.
Crucially, Video Games Tax Relief has held its spot at the heart of all this. It’s worth remembering that the scheme originally only ran for 3 months back in 2010, and it took some heavy-duty lobbying to revive it. The previously announced expiry date of 2018 has now been extended to April 2023, and who’s to say it can’t go on beyond?
The road ahead
There are about 2,175 gaming companies in the UK right now, with close to 70% of them starting life in or after 2010. We’ve got the 5th largest video games market in the world, with gamers spending well over £4 billion in 2016. The shift away from physical media has had a positive effect on revenue, and the total claimed through VGTR is now approaching £120 million. UK gaming puts over 12,000 people in the UK in full-time work – a number that could never be matched without the tax relief on offer.
All told, the maths are solid: UK gaming has never been in a stronger position than it is right now. However, this isn’t the time to ease off on the accelerator. Even recently, the worst Brexit predictions were suggesting that as many as 4 in 10 UK games firms might consider moving abroad after Britain leaves the EU. There’s no sign of that cliff edge looming just yet, though. If anything, we’re seeing more optimism than pessimism in the industry at the moment, and a real sense that we’ll be up to any challenge 2018 has to offer.
Whatever shape that challenge takes, and whatever help you need to make the most of it, RIFT will be ready.