British video games industry jobs have hit a five year high after studios ploughed millions of pounds of cash into developing new products ahead of rampant demand.
According to Tiga, the network for game developers and digital publishers, studio headcounts, wider games industry employment, tax revenues and investment have all increased while employment in the UK development sector has returned to levels last seen in 2008.
"The UK games development sector is back on track. Employment is up, investment is increasing and the sector's contribution to UK GDP has grown to £1.02bn (€1.3bn, $1.7bn)," said Dr Richard Wilson, CEO at Tiga.
"The sector's return to growth has been driven by three factors. Firstly, the explosion of mobile and tablet devices have created a significant market for games: jobs are being created in response to this demand. Secondly, the closure of big console focused studios has been followed by a surge of small start-up companies.
"Thirdly, the advent of Games Tax Relief (GTR), which TIGA was instrumental in achieving, is already stimulating growth. GTR effectively reduces the cost of games development and it incentivises investment and job creation in the games industry. For example, Eden Films has plans to build a new games studio, Codec Studios, and to develop a new £30m video game, providing employment for over 100 highly skilled development staff for a minimum of three years."
The GTR Effect
According to Tiga's report, which is based on an survey of UK games businesses with analysis by Games Investor Consulting, 9,896 creative staff in studio jobs were made, up from 9,224.
The number of jobs indirectly supported by studios rose to 18,093, from 16,864, while combined direct and indirect tax revenues generated by the sector for the UK Treasury increased from £390m million to £419m.
Overall, annual investment by studios rose from £427m to £458m and the game development sector's contribution to UK GDP increased from £947m to £1.02bn.
"We anticipate further growth in the sector following the introduction of the long-awaited video GTR from April 2014," said Zubin Patel, Deloitte tax partner.
"The tax relief will reduce the cost of development activity in the UK by up to 25% and is expected to be worth £25m per year for the industry.
"The relief is based on the highly successful film tax relief, which has provided more than £1bn in support to over 1,000 films since its introduction in 2007."
What is Games Tax Relief?
The video games tax relief will provide an incentive to video game developers to produce games meeting certain cultural criteria.
After the Commission opened an in-depth investigation, the UK removed the originally envisaged territorial spending obligations imposed on beneficiaries of the scheme.
The UK demonstrated in particular that the proposed cultural test ensures that the aid supports only games that are of cultural value. Only around 25% of UK produced games would be eligible for aid. Without this support the number of new culturally British games is likely to decline considerably.
Source: European Commission