In a report on GamesIndustry.biz, TIGA has called upon the UK government to establish a creative contend fund, to provide a new source of financing for game developers in the UK.
The organisation notes that nearly a third of UK games studios have closed in the last five years and despite the increasing number of studios, that access to finance is the number one issue facing games studios.
TIGA has proposed a fund of £3M per year, funded partly by the National Lottery, which would provide developers with loans of up to £150,000. The organisation has suggested the finance could be provided on a match-funding basis, or through convertible loans, with the creative content fund aiming to recoup costs from studios.
Unlike the UK film industry, there is little or no public funding for the creation of video games in the UK. In the film sector, the British Film Institute (BFI) invests over £26M per year, in the creation of new British film. A figure due to rise to £30M by 2017.
The statement from TIGA states that other areas of the creative industries enjoy far more access to and support from government, with independent films, arts projects & installations, sports events, and a wide range of other cultural activities are often dependent on funding from the Government. The games industry does not currently enjoy the same support.
The report also states that other companies within the games sector such as audio, animation, localisation, music, quality assurance, sound, etc. should also be able to access funding, noting those businesses are critical to the health of the UK video games industry and should be eligible for funding in respect of activities such as training and attendance at international events.
The report states that smaller, more experimental or innovative games are not considered commercially viable enough by publishers. TIGA is calling on the government to recognise the games industry as an audio-visual and cultural industry on a par with television and film – and treat it on an equal basis.
Develop notes that a similar scheme is also run in Finland through the government-backed Tekes program, which has provided nearly $70m in funding since the late 1990s to studios in the country, including Rovio and Supercell.
Develop reports that Richard Wilson, CEO of TIGA said:
Establishing a Creative Content Fund would improve developers’ ability to raise finance, stimulate original IP generation and promote studio growth. It would enhance the independence and commercial viability of game developers and strengthen the prospects for the expansion of the UK video games industry.
Recommended criteria for the fund include:
- The company is based in the UK.
- The company proposes to develop original new games IP which is innovative in terms of content, gameplay and, where appropriate, business models.
- The company retains majority ownership of the IP during the term of the loan.
- The company should have to demonstrate a robust business plan about how it intends to use the match-funding to enhance its prospects for commercial success.
- The CCF should invest in projects that have the potential for commercial success. Independent assessments of each game’s production and commercial potential should be sought as part of the CCF’s due diligence, before a funding decision is made.
- A commercial mentoring business advisory service should be provided for companies benefiting from CCF disbursements in order to provide guidance to new companies.
The report concludes:
Making National Lottery finance available to fund prototypes through the CCF would have a transformative impact. More studios would be able to develop prototypes and once a prototype is complete and operational, a route to market might become more apparent, allowing the game to be funded through to completion. National Lottery funding for the CCF would enable more developers to raise finance, develop talent, stimulate original Intellectual Property generation and promote studio growth. It would result in a wider breadth of innovative video games in the marketplace, which could in turn increase the reach of video games into wider culture. In short, the provision of prototype finance and the Creative Content Fund will help businesses, the games industry, and the wider economy.
The lack of funding is an issue that many Scottish developers and games related companies have highlighted in the last several years.
Is this a solution which would work for the industry, readers?