Is the UK’s gaming market worth investing in?

The global gaming audience is estimated to be up to 2.6 billion people with global revenues expected to hit $128.5 billion by the end of 2020 and the UK is making a huge push to take full advantage of that evolving market.

A Resurgent Industry?

The gaming industry is one that has been around for a number of decades now. Ever since American physicist William Higinbotham created Tennis For Two back in 1958, computer games have grown in stature, influence, and quality. From the introduction of Pong in 1972, to the console wars of the 1980s and 1990s, through the next generation of consoles in the 2000s, and to this current era of gaming that is taking the experiences of players to the next level.

However, after reaching a peak at the end of the 20th century with SEGA and Nintendo at the height of their powers, the industry did plateau at the dawn of the new millennium. The global financial crisis of 2008 only further hampered confidence in the market as developers and gamers both felt the pinch.

Recent financial figures suggest that the gaming industry is now working its way back to the upper echelons with which it was once accustomed. PC and console gaming is being tipped to smash the $60 billion mark by the end of the year. Mobile gaming is expected to reach $46.1 billion by the same time.

UK Leading the Way

Entering the fourth quarter of 2017, there are 2,175 active gaming companies based within the UK. Interestingly, 68% of the UK-based gaming companies were established during or after 2010. These companies include the likes of Activision, Microsoft Studios, and Rockstar Games.

London is currently the most populated area for gaming companies but other towns and cities such as Manchester, Brighton, Guildford, Slough, and Cambridge are also home to a large number of gaming companies.

The UK boasts the 5th largest video game market in the world which is astonishing when it is only the 21st most populated country in the world. It is estimated that approximately 32.4 million across the UK play video games and those players spent a staggering £4.33 billion on games in 2016.

The past year has shown that the UK gaming market has never been stronger. 2016 was officially the most successful year for games software with sales exceeding the £3 billion mark for the first time ever. In fact, computer game sales in the UK were more prolific than sales of both video and music.

One of the contributing factors for this increase in revenue has been the shift in emphasis on digital downloads from physical purchases. Physical game sales decreased by 16.4% year-on-year but the digital downloads saw a rise of 12.1% over 2016 compared to the same period of the previous year.

Tax Relief Appeal

An explanation for the increasing strength of the UK gaming market could be the Video Games Tax Relief (VGTR) that was introduced back in 2014. HMRC has confirmed that £119 million has been handed to qualifying games companies through this fund with 420 different claims being successful.

It has played a key role in helping games companies thrive in the UK. The gaming industry in the UK boasts a total of 12,100 full-time employees and that number would certainly not be possible without the extra funding from the VGTR.

Golden Era for Online Gambling

Another industry thriving right now in the UK is online casino gaming. At the end of 2016, the UK Gambling Commission confirmed that online casino gaming at sites like was the strongest sector within gambling

It was reported that online gambling is responsible for over 33% of all gambling revenues recorded in the UK with a gross gambling yield worth £4.5 billion during 2016. In comparison, the National Lottery only generated £3.4 billion and high street betting shops amassed £3.3 billion over the same period.

Brexit Blues?

The impending Brexit process still casts a dark shadow over a lot of UK politics right now. It has brought with it a level of uncertainty in the UK financial markets and a lack of confidence in a lot of UK-based industries.

However, there is quiet optimism despite rumours that up to 40% of UK-based gaming companies are considering relocating after the UK leaves the European Union. There is hope that the government will be able to calm the fears held by these companies where 57% of those companies employ workers from other countries throughout the EU.

Is There Money in the UK?

The UK gaming market has never been stronger. The stats don’t lie. The UK has always held an influential place in the computer games market. Titles such as Batman Arkham Asylum, Football Manager, DJ Hero, Goldeneye, Grand Theft Auto, and Little Big Planet have all been produced in the UK and been smash hits on the global scene.

Brexit might well have something to say over the coming years. A degree of fragility remains over every industry based in the UK until the government’s negotiations with the EU become more transparent. However, right now, the UK’s gaming market is strong and showing no signs of slowing. Even if the worst case scenario of a “no deal Brexit” does happen, there is a real feeling that the UK gaming market has enough talent and financial clout to survive the storm. UK gaming has never been in a better state.