Increasing the Video Games Expenditure Credit (VGEC) to a tiered rate of 53% for projects under £10 million and 39% for larger productions is projected to generate £530 million in additional gross value added (GVA) and 6,000 new full-time jobs over five years.
02
The proposed fiscal enhancement would raise the UK’s effective VGEC rate to 20.6%, surpassing current rates in France (20.2%) and Quebec (18.2%) to improve international competitiveness.
03
Every £1 of government investment in the enhanced VGEC is projected to yield a return of £2.12 in combined GVA and tax revenue.
04
The global video game industry faces significant contraction, with 30,000 layoffs expected between 2023 and 2024 and venture capital funding dropping from $9 billion in 2020 to roughly $3 billion by early 2024.
05
Indie game sales on platforms like Steam now represent nearly 70% of total full-game revenue, highlighting a market shift toward smaller, cost-efficient production models.
06
Even under conservative scenarios, the proposed incentive structure maintains a positive economic profile, delivering £1.3–£1.4 in GVA and £0.4–£0.5 in tax returns for every £1 of public expenditure.
Insights
01
Increasing the Video Games Expenditure Credit (VGEC) to a tiered rate of 53% for projects under £10 million and 39% for larger productions is projected to generate £530 million in additional gross value added (GVA) and 6,000 new full-time jobs over five years.
02
The proposed fiscal enhancement would raise the UK’s effective VGEC rate to 20.6%, surpassing current rates in France (20.2%) and Quebec (18.2%) to improve international competitiveness.
03
Every £1 of government investment in the enhanced VGEC is projected to yield a return of £2.12 in combined GVA and tax revenue.
04
The global video game industry faces significant contraction, with 30,000 layoffs expected between 2023 and 2024 and venture capital funding dropping from $9 billion in 2020 to roughly $3 billion by early 2024.
05
Indie game sales on platforms like Steam now represent nearly 70% of total full-game revenue, highlighting a market shift toward smaller, cost-efficient production models.
06
Even under conservative scenarios, the proposed incentive structure maintains a positive economic profile, delivering £1.3–£1.4 in GVA and £0.4–£0.5 in tax returns for every £1 of public expenditure.