The UK games development industry set a number of records last year, according to TIGA’s most recent state of the UK industry report, written by Games Investor Consulting.
The UK has never housed so many games development companies as it did at the end of 2014 (664), never employed so many games development staff (10,869), and never made such a large economic contribution (adding over £1.1bn to the UK’s GDP).
While 2013 also set welcome records, its growth was economically and structurally precarious, built on the shifting sand of spin-outs and start-ups with increased risk of mortality. In contrast, 2014’s achievements are underpinned by some radically different dynamics, most notably the long-overdue maturation of the UK’s mobile games development scene.
2013 will be remembered as the year the UK games development industry went start-up crazy. An astounding 224 companies entered the games development business that year, driving employment levels to new highs despite a concurrent and major spike in games developer closures. The majority of these new studios were mobile games developers, often micro studios with fewer than five employees.
But equity funding for UK developers did not spike in parallel, which meant that – in the space of a year – a material proportion of the UK development industry was transformed into tiny and self-reliant new companies, trusting in individual savings and optimism that self-publishing would pay off. A big opportunity, certainly, but an even bigger risk.
Movement in mobile
Fast-forward a year and we see two significant trends emerging from this risky state of affairs.
The most important is the fact that the medium-to-large scale developers have started to grow again, and it’s these companies with 15 or more development staff who are driving growth, not start-ups. A number of earlier start-ups have moved into this tier, increasing the number of medium-to-large firms, but the numbers employed at such companies also grew significantly last year.
This was driven by several factors, but perhaps the biggest was the expansion of so many mobile studios – more often than not driven by commercial success but often also supported by equity fundraising, trade sales and even the odd flotation.
Mobile gaming has been a vast opportunity for many years but the UK had been conspicuously slow to adjust to this rapidly evolving corner of the games market.
Although the UK has had mobile games developers since the WAP gaming days, very few had achieved significant scale, some getting stuck in work-for-hire and many slow to adapt to best practice mobile commercial strategies such as free-to-play models and games-as-a-service. 2014 therefore represented a breakthrough in this respect with a whole raft of UK developers launching highly revenue-generative F2P mobile games and growing off the back of them.
At the other end of the scale, a significant number of mostly smaller developers abandoned mobile for other platforms, most often PC. Enticed by reports of vast revenues generated by a handful of ostensibly simple games with supposedly limited budgets, many individuals and small teams decided between 2012 and 2013 to seek their fortunes in mobile games development and self-publishing.
This gold rush appears to have come to an end last year when the proportion of UK developers primarily focused on mobile fell to 48 per cent, ending four years of sustained growth for the mobile and tablet platform category.
Furthermore, where mobile had been the platform of choice for start-ups for multiple years, PC became the most popular platform category for new developers in 2014. It seems that start-ups are less put off by the challenges in the mobile market than they are for other categories such as PC.
So the UK’s mobile scene has experienced a fiery path towards maturity; from hundreds of start-ups, a robust and often highly sophisticated group of medium-to-large developers has emerged. The under-capitalised and insufficiently resourced have begun to drop out or move on and the more commercially astute and better funded are starting to thrive. This paints a picture of a more stable UK industry in rude health with strong growth potential, but we wonder if the same fate awaits the crowded PC scene.