The state of the UK games industry with UKIE CEO Nick Poole

more established industries like the UK's, they're only 30 to 40 years old, and a lot of our growing up was done in stealth mode effectively. Hello world. We are here at the pocketgamer.biz podcast, pg.biz, and Craig Chapple is my co-host today. Craig, great to have you first of all. Um busy times and a great time at PGC London, right? Uh nearly 3,000 attendees and lots going on there. What did you pick up on? Great to be back on on the interview show with you, Peggy. Pocket Gamer Connects London was great. It was a fantastic show, and the best thing about it was uh just the kind of positivity that you actually got from the show. There was a bit of There was There was a nice vibe, which I think from the past couple of years of events in general has been missing somewhat cuz it's been very challenging. So, it was nice to see that. It was. I mean, it was indeed, and that's one of the reasons we're chatting about it because, you know, we always look at the speakers and the

topics and the panels that really got people excited, and that's what we have in our guest today because people were talking about where's the market, where's it going, and what do I do? That brings me to our guest because in Nick Parker, we have it all. We have one of our speakers, one of the top thinkers in the industry, and a man who is on a mission that we'll learn more about. But first of all, Nick, legend that you are, welcome. Amazing. What an intro. And I have been entirely undeserving of it, but uh look, he's it's incredible to be with you. Thank you for having me. Absolutely. So, it's great to have you, and we just want to dive in right there. You got into games but an unusual path, you know, one of those less traveled cuz you started in libraries, museums. You've chaired Wikimedia UK before becoming the CEO of Ukie. So, I have to ask myself, you know, what's the thread running through your career, you know?

Conversations, cultural endeavors, libraries, museums, knowledge institutions, games. Yeah, when you say it like that, I'm not sure I can think of a logical It's I think there was There's a There's a short version of this thing, which was two formative experiences, one of which was being given a ZX 80, if you can cast your mind back that far, and sitting down and discovering that I could type lines of code into a machine that made magic happen. That was That was pretty extraordinary. And then the other one, my grandmother was a fine artist, and so she sat me down at a very early age and taught me how to draw the difference between male and female buttocks. I spent a lot of time drawing bottoms, and that gave me a great and abiding love of fine art. But really, the answer is I love the UK, and not in a sort of exceptionalist way, but because I think we have a blend of creativity and humor and invention and you know, just intellectual freedom that

means we have a pretty unique unique value proposition to offer the world. And if you look at all of the roles I've played in across the different creative industries, it's always about how do we maximize our strength and take it out to the wider world. And to me, it's found its kind of highest expression in games. It all comes together there, and I do agree very much. You know, I come from mobile and marketing and and advertising as some of my expertise and areas where I focus, and you know, UK agencies, you know, they are leading for a reason. It's the ideas, it's the creativity. There's a reason why that would carry over and apply to games as well. I think for those of us in the UK games industry, like we all know exactly what UK is, but you know, we have listeners from around the world. So, could you explain a bit about for those not familiar, what what What UK's kind of remit here? And and what is like your responsibility there? You've been doing the role for 2 years now. Yeah, so UK stands for UK Interactive Entertainment and we are the trade association that

represents the whole video game ecosystem. So everything from tiny indie devs right up to global multinational players with a footprint in in the UK. And I sometimes think it's it's easiest to describe as a kind of sword and shield. So that the sword part of it is we go out and champion the industry, try and build influence, make good things happen. And the shield part of it is, you know, defending the interests of the industry, avoiding uh you know, being caught up in things like over-regulation, trying to unbundle some of the red tape around doing business here in the UK so that we can we can help our members to succeed. And so how does that translate? I mean, we've got the UK's biggest, most influential network of games businesses, so about 700 companies that we represent. We do a lot around advice to small and startup companies around finding finance, getting the game to market, protecting your IP, that that sort of thing. And then once you build to a certain position uh in terms of the stability of the business, there are levers we can help

pull in terms of policy, regulation, and maintaining a really good business environment. So essentially we're here to help games businesses in the UK win. So I don't think I got to connect under. You're on the panel. It's quite a fiery one with the newly formed video games council, which I I think is basically trying to connect the industry powerful people in in Parliament, policy makers. And the Miniclip and Jagex CEOs criticized quite heavily historical government support for the industry. So why do you think UK government or various UK governments have historically not supported uh to the degree that other countries seem to have uh for us. So, we only just got six games. Now, uh Brazil's games industry, which is much younger, uh campaigned hard for something kind of similar

uh around uh and is getting that at around the same time as the UK, which is obviously been around for decades that the industry. Uh so, yeah.
So, what's going on? I think they were right to call it out on stage. I mean, it has to be said that conversation has has changed beyond all recognition in the last, say, couple of years. And so, we are really getting a hearing now that we we weren't before. I mean, it's still a young industry. Uh even, you know, the more established industries like the UK's are only 30 to 40 years old, and a lot of our growing up was done in stealth mode effectively. You know, if you were not a gamer um or if you were above a certain age, then you probably weren't all that engaged with games were all about. I think it's only recently that governments have come to understand the sheer scale and impact of games. And that's not just economic, it's also about the cultural and social impact that games have. So, what what we see is governments all over the world, including our own, waking up to games. Um I think the very specific agenda for

us is around the growth agenda set out in the industrial strategy. And they are seeing they've sent they see video games as one of the four frontier industries with the highest growth potential for the UK economy. So, suddenly doors are opening now that were uh firmly shut 5 years ago. And is there anything that, I guess, games companies could be doing uh to get more direct support for their businesses, to make the country more attractive for investment, and even founders to start their business?
So, I can go out and evangelize it, but I've always got the Christine Keeler problem. You know, I would say that, wouldn't I? I think games companies are amazing. Um I can land the arguments. Yuki can get out there and build influence, but nothing lands like real stories from real studios. and so the thing that's really compelling is when a studio talks about the challenges of meeting talent into the UK or looks at some of the issues around accessing tax reliefs and and the very real drag effect that has on their projects. We totally depend on

games businesses to bring it home for politicians and make it real. I see other and that's sectors lobbying very hard. We've done a lot of meetings with Sir Chris Bryant when he was the culture minister and was seeing games and he came to be known as Chris Lobby Me Harder Bryant cuz he kept asking games to turn up more emphatically and and he was saying, "Well, look, film's been in six times this week. Tele's always beating down on my door. I never hear from the games industry." Um we are in the process of building that kind of influential lobby, but we we've got some things that are really holding us back. Um you know, a lot of game studios, understandably, um when times are hard, their heads are down building the games and so they don't always make time um to share those stories, come along, you know, reach out to their MP, organize a studio visit. And so we're really, really trying to encourage people to be a lot more on the front foot because even if they can't see the immediate benefit to their business, in the long run it's going to reduce their tax burden and make it easier for their their business.

So we are not as organized a lobby as some of the other media industries and that's why we need to get our act together. We've got a big campaign launching this month called Made in the UK which is about landing the message about the strength of the UK industry and we're absolutely calling on studios and publishers across the UK to write to their MP, lobby their local decision makers, and get that message across because of the tax reliefs available to games are about 5% points lower than they are for TV and film. There's no justification for that. It's just that film mounted a more effective lobby. We heard an amazing story that the last go around when the film industry were looking for better tax incentives, um they brought in two globally famous film directors, an actor, and a copy of the film magazine from the year of the birth of the culture minister. You know, they they just went to town. What do we have? Not enough. And it's a side of desk activity for the industry right now. So, we are really working to

build our our capability on this front. I think that's great advice. It's just to be more vocal and share those stories. Again, you know, Craig, because this is something that studios have to get involved in. How How easy or how difficult is that to bring these stories to life? I mean, is UK doing something where it's like, you know, as it would be for most campaigns, just send in a video of you telling your story and we'll put it in front of the MP or where where are we at in exactly how we can do that, because that kicks off this month. Yeah, so that's the ambition is, um you know, send us whether it's graphics and and, you know, getting hold of imagery, if it's video where it tells a story, if it's a short case study, even if it's a couple of data points. You know, some of the things we've had that have been most impactful are people sending in two bullet points about how much it costs to move talent into the UK, so we can take those figures and make it real for for politicians. So, you know, the the more

studios can arm us with the the facts of the case and the just just the telling the story of an industry that wants to grow is massively ambitious. I mean, we've got so much talent. But we're not getting that critical support we need right right now. And and I should say as well, you know, we are doing better. We've had some wins. That is fantastic. We've got to make sure I mean, you mentioned the SIC codes. Craig, it might be in the weeds, but it is one of my favorite topics. Until they changed the SIC codes, we effectively it exist in government statistics. And so, the critical thing now we've got them is that games businesses use them. And so, we're going to be publishing some guidance on how to use the IC code for your business. So, it's not big, but these small structural wins are going to make a massive difference in the long term. So, we've spoken about the wins and every win counts, but zooming into actually what's broken, can you explain, you know, where are studios falling through the cracks? You know,

there's a funding ladder from prototype to launch to scale up. And things are broken, rungs are broken on that. What do you see? And what is it that you're focused on to fix? It's It's a really interesting kind of laid question for me that one, too. On on on the traditional funding model, right? There There's a progression from kind of lifestyle business into indie into being a scaling company up to being a kind of growth hub. And there are undoubtedly some rungs missing, as you say. The transition from prototype into scalable business, you know, the the gap from five people to 50 people, the gap from 1 million up to 5 million, you know, that that is a really clear funding gap. And so, what we end up with is a kind of real crowding of super early stage startups that have a prototype, they're looking for a publisher, they're looking for a game to market, and the scaling model isn't there. Equally, you know, higher up the rung, I think we don't have the kind of CD Projekt Red ambition

to put a, you know, 10-20 million pound punt behind a game with with serious growth potential on a a global basis. The difficulty with these, particularly kind of linear funding models, is the world changes, right? Now, and I think one of the things that's changed is that the traditional go-to-market is really problematic right now. We're super saturated with games. Uh you look at platforms like Steam, discovery is a massive challenge. And so, the old story of kind of build a game prototype, get a playable slice, find a publisher, go to market, and kind of scale from there doesn't really work. And so, I think one of the things that is broken is the responsiveness and adaptability of the funding pipeline. Um so, if you've got loads of people that are bypassing the traditional prototype model and going straight to market on a social platform, how are we turning up for them? You know, how how do you help a UGC developer take the IP that they've built in a UGC platform and move it into, you know, a a kind of console PC world?

And so, it's it's really interesting that not only do we need to fix the wrongs, I think we need a much more flexible We we talk about a climbing frame where you reach out and the right hand hold is there rather than it necessarily being a a kind of vertical progression. So, the framework itself needs fixed. And just to think about it, it's not there yet, but it is coming. This also becomes, I uh would imagine, very interesting when we're looking at direct to consumer, right? You don't always have to go through the store.
Yep. So, now game our business sales I need to be, you know, merch, commerce, the whole deal. But we think both stories are true, right? There there's continuing challenging headwinds in the industry. There's a lot of turbulence. Old models are challenging. There's also a solid drumbeat of really great things happening, projects being signed, innovative things going on. And And one of the things we observe is if you went early and kind of redesigned your pre-2019 operational model, then you're

in a better shape right now to move forward with the kind of new landscape. Whereas if you're still kind of maintaining a pre-2019 business model and trying to kind of cast it into '26, '27, that's going to be a real struggle. Um and so, one of the things we're seeing is is a real need to, you know, what what do they always say when you're building change? Expend all your energy not on defending the old but building the new. This is all about building the new and I think for some companies that's super hard, right? I mean if you're a very big player and you're heavily invested in a particular operational model for games, redefining yourself around, you know, a UGC straight-to-market direct-to-consumer landscape is is challenging. What one model we are seeing which, you know, I'm I'm really interested in is companies that are effectively acquiring IP and then looking at how they leverage that IP across multiple platforms. So, whether that's games, transmedia, merch,

storytelling, you know, whatever the direction of that IP is. And so, this kind of idea of being an IP holder that then diversifies the routes to market, I think is potentially quite interesting. One of the things I I did want to talk about is you you mentioned it just a moment ago is the video games tax incentives credit. It's a VGE. It used to be I can't remember what it used to be called. It used to be called something
VGTR, VGTR, there you go. And such as that and the the small details it's changing. Anyway, so you you spoke last year about kind of raising that and you mentioned that a moment ago. I guess, you know, where are we with that? How close how close how much closer are we to to getting that? And why is that important? Yeah, I think it's really helpful to understand what tax relief is for cuz there is sort of odd bit of fiscal policy that is a bit down in the weeds and a bit hard for people to get their their heads around. But, I mean, fundamentally, we're never

going to be the cheapest place to build a game. You know, labor costs are relatively high compared to other territories, business costs, and and so on. And so, fundamentally, the purpose of a tax relief is to take the edge off off that to keep us competitive with other regions. And so, tax reliefs need to flex to reflect market conditions and global competition and that's fundamentally the argument we're putting forward. So, you know, the idea of creative industry tax reliefs is to make sure that our creative products can compete on a level playing field around the world and that's why we're doing so much work to make the case for an enhanced rate for the video game expenditure credit. But also, I think one of the things that people don't always understand is is tax relief is just one part of an overall fiscal package for games. And so, it's partly about government investment, what are they putting through, for example, the UK games fund. You know, up till now, prototyping sort of capped around 30K isn't really going to get far um compared to the relative

value of other funds in other territories. So, they've just had a major funding uplift, that's great news. How are we going to deploy that? Um but also, what are the other fiscal policies that uh government could be putting forward? How do we reduce the cost of getting a visa for a dev to move to the UK? How do we take some of the edges off the the kind of regulatory burden so there aren't so many frictions? Um so, expenditure credit is really the the kind of centerpiece of what we're putting to government, what to Treasury, which is a fiscal stimulus package to unlock growth for games. Finland government got likes and cool backs for the games. I think the argument is effectively that well, you've got an established industry where you have to support new ones. Or to support something else, you know, energy, for example. Incentives for for games companies is do you have any like, well, why should we give it to games when we should we should maybe be giving it to someone else. There's only this

amount of money. All the time, all the time. And I mean, the interesting thing with tax reliefs is they're not a zero-sum game, you know, there isn't a finite budget at Treasury that is the tax relief budget. They're they're a kind of fiscal measure, not a not a budget measure. But I'm always reminded of a friend who was talking about why their mom and dad didn't have a happy marriage, and it was because they both went into the marriage thinking the other one had money. And each the same with governments and industries, that government thinks the games industry is awash with cash, that that we're just sitting on piles of gold. And similarly, the games industry thinks government is just sitting on lots of discretionary money that if it could just spend it, then it would unlock everything. The reality here is it's incredibly hard for civil servants to get money out of government outside a cyclical spending review. And the games industry is operating on razor-thin margins, front-loading capital against an unknown future return. You know, it's it's a very fragile business. And I think most of what we've been talking to government about is how you bridge that gap. You know, if if you

accept that nobody is rocking up to this with a blank checkbook, but that there are financial mechanisms that can benefit both the industry and treasury. So, one of the things we've been looking at is um IP-backed lending. Uh is understanding that, you know, companies like games entertainment companies are short on tangible assets and low on IP. Um and so, they have now brilliantly announced just this week uh that they've got the British Business Bank to look again at IP-backed lending for games. That's going to make a huge difference if we can we can push that through. Um so, it's it's really about understanding, you know, there is a mutual opportunity that benefits the exchequer and the industry, but we have to work together to design it. That's a fantastic approach, IP-backed, because I mean, literally, the IP is the money in the bank. That is the investment, and that's what's going to continue to return. So, to be able to borrow against it makes a lot of sense. Was that yours, Nick?

Uh that one I I can't claim credit for that one. So, that was a combined effort of Nick Button Brown and uh a lot of very smart people in in the games industry, but we're we're more than happy to support it. You know, we're a massive export industry. We are, you know, the added value of UK games into the UK economy is around 6 billion GBA. We're returning about 1.3 billion more to other industries through game technology. 96% of UK companies are exporting, and I'm slightly wondering whether that's just a rounding error on the other 4%. I'm sure everybody is. And so, the opportunity for UK games to be a sort of frictionless digital export proposition for the UK is is just massive. And and that's what we're trying to encourage the Treasury to see is this isn't giving us grants. We're not asking for a handout here. We're asking for fiscal mechanisms that unlock a massive opportunity. So, you've got Games Worth package. We've got an expanded UK Games Fund. Uh UK Games Fund support.

Uh and uh we've got the UK Skills Network in motion. How are these various things helping again, you know, over the next 36 months? How can companies actually benefit from that? For years, we needed an industrial strategy that talked about the UK's real strengths. And we now have one. You know, that that was published about a year and a half ago in Invest 2030, the the industrial strategy. And the fact that it not only recognizes games are a thing, but recognizes we're one of the four export industries with the highest growth potential in the UK is is a massive acknowledgement of who we are and and how far we've come. And then, each of those measures is basically about looking at a a a problem in growth. And you kind of go, "What are the barriers, and how do we get rid of them?" And so, the um UK Games Fund uplift is about uh helping more early-stage businesses to scale up, prototype, go to market. And they are now thinking about much more flexible approaches to how they do that. So, that

that's brilliant. The Game Skills Network is about the talent supply chain and the fact that you've got, you know, 6,000 graduates coming out of university courses across the year and maybe 500 jobs for them to go into. So, how do we connect supply and demand for skills in a way that means we continue to have the the global talent that we need. And some of the other physical measures, you know, the the stuff coming through the British Business Bank unlocks the the money supply. So, what does this actually translate into for companies? It's fundamentally when a business turns on the tap, it has access to quality talent that's up-to-date, relevant, and able to drive the business forward. And you know, individual studios don't need to think about all the planning that gets you there, but actually it's about having just-in-time supply of of the skills you need. On the money side, it means that some of the massive challenges in securing early-stage finance are going to get a bit easier. Um it's not going to be an overnight transformation, but in the next couple of years there is more access to opportunity. On the trade side, um

there'll be some announcements coming through soon about um financial support to help UK studios go out on trade missions, be at expo, and do business, sign contracts. So, that stuff's going to be really really big. So, each of these things, you know, none of them is going to unlock your business overnight. And and at the end of the day, it's still about great games, amazing experiences, you know, all of the the drivers that have always been. But, you're just going to find it gradually easier to do business and you're going to have more opportunity to have another roll of the dice uh to take your game to market. And that that fundamentally is what's going to drive our success. If you could redesign UK games policy, it was up to you. You're in government, you could do this. Like what are like some of the top change you would make? At Starship Reef, Media Molecule CEO, he he was the he basically said if he was to start a new 100-person development studio now, he wouldn't do it in the UK. And

Jagex CEO Emily Bailey said she was starting just a two-person development team, she probably wouldn't do it in the UK. Wow. What would you do that would change that? So, I think two things outside and one thing inside. I mean, the first thing I would actually do is change that narrative um because I love Saad and I love Emily, they're both brilliant business leaders, but um the UK is still an extraordinary place to make and sell games. We are a point of market entry to competitive territories and emerging markets all over the world. Our financial mechanisms could be better, um but actually they're really strong. And I think one of the things we slightly uh risk of doing is saying, "Well, you know, country X is offering this and you're only offering that." If you actually look at it in the round, country X often has uh significantly more punitive taxes in other places. So, balanced out Mhm. uh for the the kind of realities of doing business, I think there's a real risk that we talk the UK down. Um so, take pride for me, which is

why we're we're launching Made in the UK. We have an amazing industry. It's only going to grow from here. Uh you know, a bet against video games, as we've seen over the last 40 years, is pretty much always a losing bet. Um so, you know, I know both from talking to both of them that they actually feel that this is an amazing place and they love it and you know, they they wish it wasn't as challenging as it sometimes feels. Um but, you know, other people are queuing up to talk down games and we shouldn't join in that that that process. I think the two that I'd face externally then are about ambition and about risk. So, on on the ambition front, when I look at really rapidly growing, highly innovative communities, the kind you know, there's a race to the bottom going on around the world that we don't want to be part of. But, if you look at the territories that are really thriving, Um places like you look at what Turkey's done with its mobile community and say, "Okay, they were ambitious." That kind of mindset shift that says, "We're not

going to agonize endlessly over what we used to have or we're not going to just solely trade on our legacy in games. We're going to set our minds on to being a globally leading games hub for the future." Be be a bit more Turkey, you know, I I think is definitely one way of approaching it. Um and then the other one is is is risk. It's basically what what I think's happened. There's lots of analysis around what's happened post-COVID. Nobody wants to hold the risk. You know, so when money supply was abundant, loads of players were playing games, nobody was really thinking that hard about risk. And then when it all evaporated and people went back to work and VCs started pulling out, it was because of the massive shift in risk appetite. And you saw that echoing through global publishers as well, not taking on the same projects or or kind of cutting projects. Right now, there's a real irony. There's a huge amount capital accumulated in the money markets. We've got a lot of very well-funded, well-capitalized funds that are looking to deploy capital and nothing to spend it on. And so the reason why there's nothing to

spend it on, as as we keep hearing from investors, is because people don't want to put their heads above the parapet and start worrying again. And so there's a real risk aversion within the industry in terms of taking on people, taking on projects, uh taking those big punts again. And I understand that means fully makes sense in terms of the experience we've just had. But the sooner we can recover our appetite for risk, because this is a hit-driven industry. It's an amazing, dynamic, but hit-driven industry. There is no zero-risk model of the games industry. And so the sooner we can recover our appetite for risk and then build some shared models, you know, I I think one of the things we're seeing is the move away from VCs into project financing where you're sharing out the risk across a a broader investor base. You're looking at angels playing a role. I think government has a role to play in offsetting risk and reassuring investors. We we've just seen one very well-capitalized fund that's looking at moving to the UK

being very actively wooed by another national government who are offering a package worth tens of millions to bring their risk profile to their nation instead of to our nation. Um so, you know, the sooner we understand that if we can unlock risk appetite, we'll unlock growth, then then we'll start moving again. I think if you're a founder, it is just this reality is, right? If you get offered really good incentives somewhere to reduce that risk for you in a very challenging market, and you have the opportunity, you might just take it. As we that Turkey is doing that. I remember many years ago, Develop magazine, I don't know what the UK that remembers this. They ripped off an old headline, uh but it was "Will the last person in the UK please turn out the lights?" because that was when Canada was offering incredible tax incentives. And then we have just kind of do the same. He's offering. Craig, you know, is it good to compete on that for exactly that reason? You know, you bring up that that old cover,

and you could do that with anything. Right?
So, you know, when you go on holiday and there's like four restaurants, and you're trying to pick which one to go to, I'll always avoid the one where the restaurant has standing outside and asking you to come in because you know they're desperate for the customer. I'll I'll go to the one where people are having a great meal. And I think we need to be super careful about other territories that are offering very attractive but short-term incentives. So, some of the territories that we would game spaces is from Western Europe elsewhere have started deploying things like taxes in a way that, you know, the upfront of these companies companies finding there's a bit of a sting in in that tail. So, you know, we think that there is, you know, we're a highly mobile industry. You could at the end of the day build a game, you know, anywhere in the world. Uh and if you want to go to the cheapest place in the world, then, you know, you're unlikely to be building a game that's going to achieve global success. And so, we may not be the cheapest

territory, but we are, I think, the best territory in which to build a successful game and scale it to a viable long-term, you know, success story. So, yeah, being really careful about short-term flashy incentives that then evaporate once you've kind of relocated your business. But, what I do think on this one, um is why choose, right? You know, we are looking at an increasingly diversified supply chain for game development. We're looking at, you know, the extraordinary strengths in code and work for hire that the UK has developed in in recent years. So, we explicitly haven't said we want the UK to be the best place in the world to make and sell a game, partly because every other territory is now using exactly the same word. What we want is for the UK to be seen as the global hub for IP and innovation. Is that we want people to bring their ideas and their stories to the UK to use our technological know-how to build games and to use our monetization know-how to drive a successful business. And but leverage supply chains elsewhere, of course, because why wouldn't you?

I want to pick up on that for a moment because being a hub means that you have talent, you have innovation, um creativity. And And that is here. That's why you are so passionate about your mission and your campaign made in the UK. But, you've also warned in the past about uh the UK is becoming an incubator economy or can be becoming an incubator economy where talent and innovation exist, but they aren't retained. So, um what are your thoughts about that? Where are we on that? And what's being done or what can a studio do to retain the talent, improve the culture, and be a place where it's um you know, is it down to industry bodies? Is it down to studio leadership? A mix of both? Yeah, it's such a great question. I think there's there's TV I hesitate to mention Boris Johnson on this podcast, but I'm going to mention him briefly. Uh you may remember he gave a really bad speech about Peppa Pig a little while ago. Wow. And what he was meant to say,

the speech that was written for him, is that when they were looking for investment to secure the IP behind Peppa Pig, they had to go overseas. They had to sell that IP overseas because the capital wasn't available in the UK uh to scale that IP. And so, we have a similar issue here that we're a great place to start a company, we're not the best place to scale it right now. And and that's where we need to back ourselves a little bit harder. So, we need to see more uh incentives to attract foreign direct investment. We need to see more domestic investment in retaining our IP so that the value of what we build goes back into the supply chain of games in in the UK. So, there's there's that side of it. The other side of it, this conversation I'm having a lot with the industry at the moment is is build studios, not games. Uh is that traditionally we've thought about, you know, when I look at pitches, all I ever see is the game. Uh I don't see the company, the people, the culture, the values, the technological ideas that that sit behind

that game. And so, if we really want to think about what we're building for the long term, it is about companies that reinvest in their brand and their people and their IP and their technology. And if you look at some of the UK success stories, you know, you look at the the Rebellions, the Hello Games is um one of the ways that they've achieved that success is by not outgrowing uh the market, by not taking all the VC investment, but by building stable cultures and businesses that have strong IP and the strong track record in innovation. And so I think you know, if we want to get out of this loop of having to go overseas for investment into our our ideas, then we need to build stronger companies around this industry. Getting down to the core of it, what does a studio model look like in 2026 and a bit beyond? Because you've said this is what we need to do, but there's got to be a model or a framework to enable that. And it probably starts with

the studios as well. Yeah. And so the people we're seeing really accelerating into this are building strong core teams and then leveraging diversified skills elsewhere in the supply chain. So um they're building a strong culture around the brand. They're occupying a niche and not trying to outgrow that niche. Um they are reinvesting in long-term skills development for their people rather than kind of laying off and and that kind of breathing in and out of people that some businesses have had to do recently. Um they're thinking in the very long-term about the balance of work for hire and owned IP and their own projects. And so essentially what they're doing is is taking a highly adaptable and flexible approach. And again, you know, a lot of what I hear in the industry is established ideas, traditions if you like, about how a games business runs. I think the people that we're really seeing sort of move into the future are the ones that are setting some of these established ideas aside and saying, "Okay, let's let's be agile. Let's be

creative. Let's discover new ways of doing things." Yeah. And unlock the value of IP. That's what I'm hearing again and again and again. And that's so different than before. Yeah. Yeah, it's huge. And you know, I mean, I was fascinated by the pocket gamer trends media event. I think that's a really far-sighted development. And I think we think of it in quite a simplistic way as sort of terrible TV and film adaptations of Mortal Kombat franchises, you know, but actually, if people find a world that's really beautifully crafted and characters that they empathize with, then they're going to want to play it, they're going to want to watch it, they're going to want to buy it. Um and so understanding the relationship people have to IP, I think it's going to be good. Well, there you go. We're leading on this one, Craig, because we are the first with that type of a show. I guess it wouldn't be a a games industry podcast in 2026 without asking about AI. Now, how much are you hearing

from members, from studios about their use of AI? So, on the one hand, we're hearing that there's there's extremes, right? And some people are saying, "Don't don't use this." Some fans like at least the front end use of AI in games. And then some companies are like, "Well, we definitely want to be using this, and it's going to help us with our productivity." This like so many ends of the scale at the moment. But, I guess from your point of view, like what are the opportunities there? What are you hearing? I mean, I've been working in AI nearly 25 years now. That was my postgraduate work. So, it's it's interesting to see how it's it's evolved. There's kind of two polar stories, and neither of them is entirely true. One is the AI slop race to the bottom, and the other is the AI utopia in which you press a button or enter a prompt, and the the AI builds the game for you. Uh at which point, good luck with the quality assurance on your code base. But, um the the reality is AI value in in the middle. So, what we're seeing is companies, particularly in games,

because we've been early adopters on AI for the last 20 years, finding ways of embedding and integrating AI into the development pro process that add value. And interestingly, most of those at the moment are in productivity gains, so in project management, integration of workflows, uh working across, you you large-scale or kind of multi-site teams, asset management across the supply chain, you know, AI is is delivering real potential there in terms of automating the pain points in just production management. Less so gen AI. Where where we're seeing gen AI really have an impact is ideation and some procedural generation, obviously, but also um extrapolation. I guess so we we're seeing, you know, some developers experiment with building out the assets for a level using AI to extrapolate the rest of the level and then going in and turning that into a playable experience. So it's that forgive me for using a brand name, but it's kind of the co-pilot model for for game dev in in terms of extrapolation. But I I think the thing we're doing is

quite neatly navigating between utopia and and disaster to say, "Okay, it's a tool." And and the brilliant thing about games is you look at the last 30 to 40 years of technology change and every time there's been a major shift, the industry that's turned around and gone, "Cool, let's find out what it can do." has been games. Um and so there's a massive role there. I think we've got a huge role in normalizing this stuff into the public um so that they understand what it is and what it isn't and and being transparent about it. There are some business risks. We've seen a couple of valuations for for sales and acquisition acquisitions that have been impacted by a lack of clarity on how AI is being deployed in the development process. So we know studios need to tighten up in terms of how they're using AI because that's where the transparency and accountability agenda is going to be going to be a big one. But also there there's some big problems the industry that we haven't really got any structural solutions to yet. Discoverability being my favorite at the moment is, you know, when you've got 15, 16,000 games coming out on Steam, how do

you find the next amazing noir-ish, you know, thing that you really really love? And there's no game curation, there's no recommendation layer for games really and it's kind of what you can discover on platform. I think AI-based curation of game experiences is going to be massive and and we're super excited about that space. Well, that is exciting come to think of it. Games recommendation engine, absolutely. That would be a help. It would do to to games what you know, what Amazon's collaborative filtering did to to commerce. You know, people like you like this.
Exactly. We need that. That's That's a free idea for anyone out there. Build it, please. You know, we need consumers to be confident in the certification and and age rating on games. At the moment, the workload involved in certifying games is massive. There are opportunities to accelerate that process through kind of managed AI. I think it basically, you know, if we're thinking about AI Bunny,

you just look at what does the industry find most painful right now and how can we leverage automation and insight at scale to solve that problem. Mhm. Mhm. Well, you said automation. I'll pick up there because for me everyone is a person. You have a title, and it's very prestigious, but you're a person, and I am fascinated the more I read about you, I have to say. Sincerely, because you enjoyed building automata, and probably can't see it, but I'll bring it in here cuz you would appreciate this. My recent birthday gift. Oh, the Antikythera mechanism. That is one of my favorite bits of kit in the world. That is beautiful.
we are joined somewhere, Nick, you and I. So, when I read that, I was like, oh, this great stuff. So, what is it about mechanical play and craftsmanship that that fascinates you? And and how does that come together with play? Because you said it yourself, you know, we're going to think about more physical, more hybrid, more transmedia, like the PG

event. Um how does that all come together? And what does that shape in you? So, I I'm old enough to admit now that I'm I'm a strategist. That's what I do. I I look at goals and outcomes and figure out pathways to get there. And so, when I when I go to sleep at night, I build machines in my head because rods and connectors and cams and machinery and and knowing that if you turn a crank over here, something's going to happen over there. That that is how you shape a better future for an industry. And and so, the reason I love what Ultima is the same reason I love this job is because you can engineer better outcomes. Um and you have to believe that's possible and make it happen. And one of the hardest jobs in the world is explaining to people if I turn this crank over here, then there'll be a tax relief over there and that's why it's good for your business. But actually, you know, we need to believe not just that we receive policy and things happen to the industry, but now we're in control of our own destiny. And I think that's really really

important. On the play front, play is how we practice for life and it always has been. And I I I get really upset when I hear about, you know, people objecting to kind of games that have shooting in them. You know, young people have been playing with sticks as guns since guns were invented and before that, swords. You know, this is how we safely build pro-social behaviors. We explore the limits. We explore what society is all about. We explore who we are and understand who other people are. And so, play is is one of the most essential parts of the human condition. And I hate the way it gets devalued. I I hate the fact that it's treated as trivial trivial or something for children. Um because it it is, you know, the more we play, the better we get at being humans and the kinder we are to each other. Um so, I think what games mean, you know, it drives me mad when people obsess about screen time or propose just banning things unilaterally because the screen is the least important part of that interaction. What matters is the

worlds that people are building and participating in behind that screen. And if we close that off from a generation of kids, all we doing is digitally disenfranchising them forevermore. Um, so I think more play, more screens, uh, you know, understanding what it is, uh, healthy balance, obviously, but, uh, let's stop demonizing play as though it was somehow trivial. What is the favorite game you're currently playing? And then what is your favorite game of all time? So the the game I'm currently playing is one that everybody's currently playing, which is, uh, Expedition 33, Player Obscure. Uh, and I know I should be saying a great British game, but I have to take my hat off to the development team and to Kepler for this one. You know, if anything starts to lift the lid on the narrative and storytelling capabilities of this medium, then then it's that game, and it's it's rightly being celebrated for it. So, uh, that one. Uh, and favorite game of all time, uh, I should say Elite because it was the original Elite that that soaked up most

of my young years and got me into, you know, trading and economics and and so on, but actually I spend most time on is my guilty pleasure, which is Fallout 4. Uh, so I I do regular reruns and and new character builds on Fallout 4 because it is such a beautifully crafted world with such depth and and layers to it and such a community around it. So, uh, yeah, I'm shamelessly a Fallout 4 fan. Nice. Choices. Solid choices. Thank you very much for for being on the show. We really appreciate it. Absolutely. Well, thank you as well, Nick, and also for telling us all the different ways studios can get involved and take some control back over their business destiny, um, by working with you and by paying attention to what you're building, the campaigns that you're launching, and what's coming next. And and uh, thank you so much. I did, funnily enough, just talking to Jackie earlier about, you know, it's not just about what's happening and what what regulation, it's about agency for the industry. It's it's the industry feeling that it can take ownership of that, and and I I love it.

They are the most I mean it's wizardry, isn't it? Building a game. It's it's technically just beyond all comprehension how they build a game, ship it, and allow billions of players to play it. And uh the more we can give them control and recognition, the the better, I think. So, now it's been such a pleasure. I I like that very much. Agency for our industry, that's very strong. Thanks again, and I'm sure that we will have you back and possibly see you more often on Pocket Gamer as well. Thanks again. This show is all about how to do your job better. How to make an amazing game. How to market it. And you have a say. So, if you have a story or know someone we need to shine a light on, then we would love to hear from you.
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