A stabbing wake-up call was dealt to the UK games industry today with new independent data revealing that the sector’s workforce has contracted by nearly nine per cent since 2008.
The extraordinary rate of decline – revealed for the first time in the latest issue of Develop – represents hundreds of job losses nationwide, as a growing group of British developers move abroad for work.
The result is a UK games industry on the precipice of another disastrous fall down the global league of game development nations – a situation some say is worsened with the UK bereft of state aid while the likes of Canada and France offer world-leading tax breaks to encourage investment.
Dundee in particular is suffering. The paralysis that followed the collapse of Realtime Worlds resulted in a sixty per cent cut to the once-buzzing development cluster’s workforce.
Research group Games Investor Consulting revealed that, today, Dundee has under 160 development staff in full time roles. Realtime Worlds, at its peak, housed around 250 staff.
The analyst group’s director Rick Gibson presented the data in Develop from a comprehensive industry survey – soon to be published by industry association Tiga.
In a new Develop Column, Gibson says many staff made redundant from Realtime Worlds “are being scooped up by other studios, but the UK overall is still losing headcount.”
Said Gibson: “After the RTW recruitment auction, a minority may leave gaming, but in a global industry with a highly mobile workforce, many will use this as the opportunity to work for overseas games companies.
“Data is hard to gather, but TIGA’s [previous] 2009 survey found that half of studios’ lost jobs went overseas, 72 per cent of them to Canada.”
It is Canada that, amid the panic that sweeps the UK, is thriving within the games industry.
This is the central issue that the latest issue of Develop is focused on. A new feature lists the key reasons why developers want to move across the Atlantic, with a sixteen-page editorial on what each region in Canada is providing.
With tax break subsidies as generous as 40 per cent of production costs, publishers are pouring investment into Canada. In provinces Ontario and Quebec, tax relief is offered at 35 per cent on labour and production costs.
In July last year, Ubisoft announced it was investing over $473 million in building a new studio in Canada, claiming it will create 800 new jobs over the next 10 years.
The studio was chosen to be in Toronto, Ontario.
Likewise, THQ recently announced it was going to open a new studio in Canada, set to create 400 new jobs and expand to include all sorts of disciplines including design, engineering, art, content and technology development, quality assurance and localisation.
That studio was chosen to be in Montreal, Quebec, yet an exec central to the deal would have considered the UK if it thrived from tax breaks.
Activision’s outspoken CEO Bobby Kotick recently explained why his firm – the biggest third-party publisher in the world – was reluctant to invest in the UK.
“It is ridiculously expensive to live in the UK, especially in London,” he said. “What dictates our expansion plans would be whether we can compensate our employees fairly and whether they can achieve the quality of life that they want."
Develop Editor-in-chief Michael French, in a new opinion piece published here, said: “It’s clear that Great Britain is no longer successful on the global stage we once dominated.”
“It’s not just a ‘the writing’s on the wall’ scenario. The facts bear this out. Tiga’s recent census of the UK sector shows that half of the jobs lost in the UK went overseas, three-quarters of them to Canada.”