UK Game Developers are investing in employment despite the rising costs

Cost increase and revenue decline may still paint a bright picture for developers.

UK video games industry trade association TIGA released a Business Opinion Survey, which shows that 86% of respondents expect their costs to rise in 2023, while 75% plan to grow their organization’s workforce over the year.

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TIGA’s research was carried out in December 2022 and January 2023. The survey is based upon a sample of 36 games businesses including small, medium and large firms, developing games across mobile/tablet, VR, PC and console.

Survey includes the following key findings:

  • Costs: 86% of respondents anticipate that their company’s costs (e.g., employment, equipment, electricity, etc.) will likely increase over the next 12 months. 11% expect them to remain the same, and 3% expect their costs to fall.
  • Optimism: 40% of respondents said they were more optimistic about their company’s prospects than 12 months ago (this compares to a figure of 53% in the previous BOS). 30% reported that they were neither more nor less optimistic. 30% said they were less optimistic (up from 12% in last year’s BOS).
  • Investment: 31% of respondents said that the outlook for investment in their business (for example, in R&D, training, new games development, etc.) was more optimistic than 12 months ago. This compares to a figure of 47% in the previous BOS. 50% said that the outlook was unchanged. 19% said the outlook for investment was less optimistic (up from 9% in last year’s BOS).
  • Employment: 75% of respondents plan to grow their organization’s workforce over the next twelve months. 19% expect to keep their organization’s workforce at current levels. 6% think that their organization’s workforce will diminish slightly.
  • Economic environment: 67% of respondents to the TIGA survey believe that the economic and business climate is favourable to the video games industry. 11% consider that the environment is neither favourable nor unfavourable to the sector, 19% feel that it is unfavourable. 3% did not know.
  • Performance: 75% of respondents reported that their company was performing either ‘very well’ or ‘well.’ 22% said their company was performing ‘neither well nor badly.’ 3% reported that their company was performing ‘badly’ or ‘very badly.’
  • Obstacles to success: 52% cited skills shortages and skills gaps as the biggest obstacle to the success of their business (up from 40% last year). 14% cited discoverability (down from 19% last year). 22% referred to limited access to finance. 6% noted the disruption caused by the pandemic. 6% identified ‘Other’ obstacles.
  • Brexit: 83% of respondents said that leaving the EU had had a negative impact on their business; 11% reported no impact; 6% did not know if there had been an impact.

TIGA CEO, Dr Richard Wilson OBE, said:

“The UK video games development and digital publishing sector is operating in an inflationary environment which is increasing businesses’ costs and dampening both consumers’ and businesses’ discretionary expenditure.

86% of respondents to our survey expect that their costs will rise in 2023. Only 40% of respondents are more optimistic about the outlook for investment in their business compared to 12 months ago, while 30% are less optimistic.”

Dr. Richard Wilson OBE also talked about how the government can help reinforce the industry’s growth, saying, “a Video Games Investment Fund would provide funding of up to £500,000 available to games businesses on a matched funding basis.

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