Game Development and Digital Growth: Europe

Key insights

7 takeaways

01
The document reports that developers receive around 8% of the price consumers pay under the traditional retail-driven value chain, compared with 70% to 100% under online distribution.See it on page 4
02
The EGDF states that Europe's global market share of video game production is only 5%, and it sets targets of doubling this to 10% within five years and reaching 20% by 2025.See it on page 11
03
The EGDF expects the number of employees in the sector's SMEs to double from a 25,000 base to between 50,000 and 60,000 over the next five years, provided European SMEs can compete on a level playing field globally.See it on page 10
04
The document forecasts that the shift from retail to online distribution will happen by 2015, during the next home console cycle.See it on page 6
05
The authors state that around 5% of initiated video games projects become profitable in the traditional retail-driven market.See it on page 6
06
The EGDF argues that video games should be made eligible for public funding in all member states, citing Canada's unrestricted sector-wide tax credits as a model.See it on page 11
07
According to Newzoo 2010 data cited in the document, about 50% of adults aged 25 to 50 play video games on a regular basis.See it on page 8

Summary

The European Games Developer Federation (EGDF) presents a position paper on game development in Europe, arguing that video games are a cultural, economic and innovation driver and urging the European Commission to support the sector. The paper cites Newzoo 2010 and PwC 2008 market data, ICO Partners 2011 company figures, and a Hamburg University of Technology innovation model. It states that developers typically receive around 8% of a retail-driven price, compared with 70% to 100% in online distribution, and that the retail-to-online shift is forecast to happen by 2015. It reports that European production outcome has a global market share of only 5%, with a target of 10% within five years and 20% by 2025. The EGDF expects SME employment in the sector to double from 25,000 to between 50,000 and 60,000 over the next five years if European SMEs can compete on a level playing field. The document recommends that video games be recognised as cultural expression, made eligible for public funding, and supported through prototype development and IP creation schemes. It also proposes broadening the definition of innovation to include content, services and business models. Citing studies, it states that about 50% of adults 25-50 play video games on a regular basis, and games have influenced the imaginations and media habits of two generations.