The videogame industry generates significant income yet it can be a cutthroat marketplace where small indie developers struggle to remain competitive against larger global studios. TIGA, the network for games developers and digital publishers, has recently released a new report, Sustaining Success: A Video Games Investment Fund (October 2018), calling on the UK government to introduce a Video Games Investment Fund (VGIF).
The aim of the fund is to aid studios access to finance, thus promoting the development of original IP and studio growth. This would not only help standard videogame developers but also VR studios as well – being that it can be more difficult to turn a profit with the technology.
TIGA’s idea is for the VGIF to provide funding of between £75,000 GBP and £500,000 to videogame developers nationwide. Funding between £75,000 and £100,000 would be delivered as grants while above £100,000 soft loans would be matched pound for pound to ensure that games companies find new investment from other sources.
“Britain’s video games industry is a world leader, and it’s vital that it stays that way. TIGA’s proposal for a Games Investment Fund is something Labour is seriously considering as a way to boost innovation, investment and jobs in the sector,” said Tom Watson MP, Deputy Leader of the Labour Party and Shadow Secretary of State for Digital, Culture, Media and Sport, in a statement. “We need to make sure we sustain success in one of our most important creative industries.”
Research commissioned by TIGA shows that the VGIF could increase headcount by nearly 1,500 staff over five years from 2019 to 2023. In that same time frame over 2,700 indirect jobs in the supply chain around games development could be created. Additionally, the investment could contribute an additional £197 million in tax revenues over 5 years.
“TIGA’s plan for a Video Games Investment Fund would improve developers’ access to finance, encourage the creation of new IP and strengthen the UK video games industry,” commented Dr Richard Wilson OBE, TIGA CEO. “The matched funding criteria would attract new investment from new investors into games and drive employment in the industry. The VGIF would also enhance productivity growth in the sector by catalysing investment in capital, skills and innovation.
“A similar scheme in Finland operated by the agency Tekes has provided financial support to over one fifth of the entire Finnish games industry’s studio population. The programme has more than paid for itself: for every euro invested by Tekes in the games industry, a return ranging from nine to 26 euros has been generated.”
Should the VGIF become a reality, VRFocus will let you know.