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The videogames industry is undoubtedly a UK success story.

An industry incubated in Eighties bedrooms and garages – with coders selling their games through mail order, local stores or, if they got a break, high street chains via publishing houses – is now worth more than the music and movie industries combined.

Repeated COVID-19 lockdowns have further fuelled the growth. “Over the past year and a half, growth in the games industry in the UK has been massive because everyone has been forced online,” Laura Harper, commercial partner at law firm Irwin Mitchell, tells TechBlast.

“The investment landscape for videogames companies is a success story within the creative industries – and, actually, the UK economy as a whole.

“That has been to the benefit of the great pool of talent and business professionals in the industry, both regionally and nationally. They’re making great games – and they’re exporting them.

“It’s one of the few sectors we are truly world-leading in.”

 

The UK has the leading videogaming market in Europe – and sixth worldwide – with a value of £7 billion. It rose 30% in 2020 and, despite a marginal anticipated fall in 2021 as a result of the return to socialising and workplaces, is predicted to return to growth next year.

With more than 2,200 studios based in the UK, funding and acquisitions are now commonplace as investors seek to capitalise on the booming market.

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However the Eighties market built around 8-bit home computers such as the Sinclair Spectrum and Commodore 64 ultimately crashed, before a revival around 16-bit consoles such as the Super Nintendo.

The entrance of Sony to the market with the original PlayStation and PS2 again led to a big acquisition drive.

“At the moment there’s a lot of money being invested,” says Harper. “When we’re talking about regionally, yes, there are a lot of independent studios – but remember, around 15 years ago a lot were bought up by the big global giants and the landscape subsequently changed and they all came out again.”

The third boom market has been centred around the return to that ‘bedroom coder’ mentality – with indie developers able to distribute digitally via the PlayStation Store and Xbox Live, with no need to purchase physical inventory and sell discs via retail outlets.

 

However it has never been more important to protect the rights of these talented entrepreneurs. Harper is a recognised advisor to businesses in the creative industries and digital sector, providing legal advice on the creation, acquisition, protection and commercialisation of intellectual property. A recent deal saw her advise alongside corporate partner and colleague Adam Kaucher on the high-profile sale of Liverpool studio Firesprite to Sony Interactive Entertainment.

“I’ve worked in the industry for 20 years and seen big changes in that time,” explains Harper. “People encounter all kinds of problems which the team and I look to circumvent and find solutions to: for example, how they collaborate with third parties; how they find freelancers; and how to get a game published.

“We specialise in how to commercialise IP. People coming out of large organisations, universities or businesses and into this industry face the same challenges: cash flow, investment, people, real estate.”

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The videogames industry benefits from favourable tax incentives. These are due to end in 2023 but Harper believes the government will likely extend them.

She adds: “But because of Brexit, there’s a lot of talent not able to come into the UK…. it is mitigated by remote working, but there are still legal issues around having employees based in different countries.”

 

So what one piece of advice would she offer an entrepreneur looking to break into the videogames industry?

“Remember that cash is king! And work with great people that inspire you. You really do need both to succeed – the creativity and the bottom line.”