Think Global, Create Local, a new report from the British Film Institute (BFI) and industry body UK Interactive Entertainment (UKIE), has revealed the largest game development clusters across the UK, with Scotland reaching the number four position.
When broken down into cities, Edinburgh placed 6th in the list of UK games clusters, with Dundee coming in at 10th.
Based on data from 2016, Scotland was reported to have 113 games companies, employing 1,156 full-time employees (FTE) and generating £131.2 million in Gross Value Add (GVA).
This lead to Scotland being the fourth largest games cluster in the UK, behind London, the South East and the North West.
Scotland hosts 6% of the UK’s game developers, Wales 3%, Northern Ireland 2% and England the remaining 89%.
The report shows the industry in Scotland located in three clusters, in Edinburgh (32 companies), Dundee (33 companies) and Glasgow (38 companies). This is interesting as it’s a far more equal spread many people would expect, given Dundee’s heritage in the games sector. It also highlights Edinburgh’s rise as a ‘tech’ pioneer, with many games technology companies (Speech Graphics, Delta DNA, etc.) emerging from the city’s vibrant startup scene.
Glasgow’s position in the report, with the highest number of companies, yet the lowest number of employees is fascinating, as the city has in the past not enjoyed the same clustering effect as it’s neighbours.
The UK Context
In total, the UK’s game development sector employed 16,140 FTE in 2016, contributing £1.35 billion in GVA to the UK economy.
The report reveals a huge amount of information about the games industry’s spread across the UK, with 55% of roles based outside of London and the South East, while 23 towns and cities across the country have more than 20 game development studios.
99.5% of games companies in the UK are small to medium enterprises (SMEs), with fewer than 250 staff. Micro studios, classed as those with fewer than 10 staff, made up 13.7% of the total businesses.
Only nine games businesses across the UK employ more than 250 employees, with studios such as Rockstar North, Sumo Digital and Creative Assembly responsible for 26% of the industry workforce and £840 million GVA.
The Creative Industries
The report also highlights the fact that in the UK, the games sector remains considerably smaller than other creative industries, including film, publishing, music and the arts.
However, when broken down regionally, Scotland’s games sector is show as producing double the GVA of the nation’s film industry.
Scotland’s games industry reportedly contributes £1 of GVA for every £1,000 generated in the country. This equals the West Midlands, but lags behind the South East (£1.40), North East (£1.90) and London (£3.40).
The full report can be downloaded directly from the UKIE site as a PDF: Ukie_Think_Global_Create_Local_Jan2020
2012 – 2016 – 2020: Where Is Scotland Going?
In 2012, a now notorious official report into the economic impact of the creative industries upon Scotland’s economy valued the country’s video games sector at zero. Although they did point out this was due to ’rounding down’, it remained one of the only pieces of research to look at the sector from a business and economic point of of view.
Fast forward four years and the UKIE/BFI Think Global, Create Local report paints a very different picture, of an industry which is contributing significantly to Scotland’s creative industries and is a valued part of the UK’s booming games market.
The diversity of company types, the spread across multiple cities and the impact in terms of GVA shows that Scotland’s games industry has a very great deal to offer.
However, when it comes to the interactive world, the only constant is change. Reliable hard data on the games sector remains difficult to find, despite several promising initiatives from organisations such as UKIE and NESTA.
In the four years since 2016, the industry has continued to change and evolve. The challenges facing developers do likewise. It can be argued that creating videogames is faster, easier and cheaper now than it has ever been (for certain types of game) and that the real challenge for developers is now finding a route to market, a business model acceptable to players and gaining traction and visibility in a world where content in no longer scarce.
The most recent update of the company directory on the Scottish Games Network (carried out in December 2019) revealed a very high attrition rate for game developers across the country. From the high point of 115 in 2015/16, the tally of active companies now stands at around 40, a decrease of just over 65%.
This is not based on hard company data, like the UKIE/BFI report, but upon personal contacts and updates from founders. Many of the studios no longer operational were the micro studios and SMEs which the new report highlights as the backbone of the industry.
Equally worrying (and equally anecdotal), there is no real ‘start up’ culture within the games sector in Scotland. Despite a highly active start up community within the wider ‘tech’ scene and a wide range of support and funding on offer, very few games companies are active participants.
This, combined with a lack of spin outs from the universities producing games graduates, leaves the games sector a little exposed when it comes to the next generation of studios.
While the results of the UKIE report are most certainly grounds for celebration, we need to be looking ahead to ensure that Scotland can build upon it’s heritage and legacy in the video games sector, to produce the next generation of developers, producing critically and commercially successful games.