- 86% of closed studios never growing beyond four staff while 83% fail to grow above 15 staff
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Only 52% of studios founded between 2008 and 2018 survived to their fifth year, with 53% (468 studios) not making it to 2023.
This is according to a new report from TIGA which shows that the most dangerous period for game studios is between their second and fifth year.
Their latest report, entitled ‘Scaling-up the UK Video Games Industry’ reveals that 64% of studios closed within this four-year window. Studios with fewer than five staff are highly vulnerable to failure, with 86% of closed studios never growing beyond four staff while 83% fail to grow above 15 staff. In contrast, only 14% of studios with over 15 staff closed.
During TIGA’s research period, 50.2% of studios didn’t grow, and 30.9% saw a decrease in size.
So how can studios scale up?
As part of the report TIGA suggests five measures to scale up the UK video games industry. These are:
- Establish a National Games Accelerator to enable more start-ups to scale-up.
- Introduction of a Video Games Investment Fund to provide £ for £ match funding.
- Provision of subsidized co-working hubs for local games developers.
- Enhance the Video Games Expenditure Credit.
- Retain and boost the UK Games Talent and Finance CIC to support developers via the Prototype Fund and Content Fund.
“The crucial strategic challenge facing the UK video games industry is how to enable more start-ups to scale-up and grow,” said TIGA CEO Dr Richard Wilson OBE.
“The UK is a great place to start-up a studio, but growing is difficult, especially for independent studios. Many studios stay small. 78 per cent of all UK games studios employ four or fewer people.”
TIGA chairman and Rebellion CEO and creative director Jason Kingsley, CBE added: “The endemic problems and opportunities around starting up and growing to scale suggest that TIGA’s policy proposals are needed to help more UK games studios grow from the danger zone (under 5 staff).
TIGA’s includes analysis from Games Investor Consulting on 882 studios founded between 2008 and 2018 and you can download the full guide here.
