State of Play Inquiry: UK Video Games Industry

Key insights

6 takeaways

01
Ukie identifies access to finance as the most significant barrier to scaling up, especially for companies developing new intellectual property, since traditional debt finance is often inaccessible.See it on page 2
02
The submission reports at least £6.2bn of foreign investment through acquisitions of UK companies between 2020 and 2024, while domestic investment through acquisitions was less than £8m in the same period.See it on page 2
03
Between 2023 and 2024 there were 248 studio closures in the UK, and the submission notes these closures and reorganisations have continued into 2025.See it on page 1
04
A study by Alma Economics for DCMS found that every £1 invested in the UK Games Fund generated £5.40 in benefits, created 530 jobs, and led to long-term productivity gains of £42 million.See it on page 3
05
Ukie's business case to the Treasury recommends raising VGEC to 39% on 100% of qualifying expenditure, with a 53% games growth rate on projects of £10m or less, which Ukie projects would deliver £479m in additional GVA annually.See it on page 5
06
In 2022, Ukie's industry census found that 29% of the directly employed workforce came from the EU or outside the UK, and rising visa costs are described as a major expense.See it on page 2

Summary

Ukie, the UK trade association for video games and interactive entertainment, submitted evidence to the Culture, Media and Sport Committee's State of Play inquiry into the UK video games industry. The submission covers economic, cultural and technological contributions, structural barriers to growth, skills, finance, and the Video Games Tax Relief reform. It states that the sector supports 73,000 jobs and contributes £6bn in Gross Value Added to the UK economy, with 55% of development jobs based outside London and the South East. It also reports that 248 UK studio closures occurred between 2023 and 2024, and that around 2,500 businesses operate in the sector, 98% of them SMEs. Ukie identifies access to finance as the most significant barrier to scaling up, particularly for companies developing new intellectual property. The submission cites a foreign acquisition total of at least £6.2bn between 2020 and 2024, against less than £8m of domestic investment through acquisitions over the same period. Ukie also recommends a Digital Creativity GCSE as part of the Curriculum Review. It argues that the Video Games Expenditure Credit should rise to 39% on 100% of qualifying expenditure, with a 53% games growth rate on projects of £10m or less, and notes the Spending Review is scheduled for this Spring.