THE trade association for the video games industry has called on the Chancellor to introduce a Video Games Investment Fund (VGIF) in next month’s Budget.
The Independent Game Developers’ Association (TIGA) believe the move would aid access to funding, promote the development of original intellectual property and encourage the growth of studios.
In a new report, TIGA said the fund would make grants or loans of between £75,000 and £500,000 to games businesses on a matched funding basis.
The suggestion has won political backing from Dundee West’s SNP MP Chris Law, co-chair of Westminster’s All Party Parliamentary Group (APPG) for Video Games.
Law said: “Establishing TIGA’s proposed Video Games Investment Fund would boost investment and employment and help to grow the video games industry in the all of the UK’s creative hotspots, including the Dundee and wider Scottish games development clusters.”
Shadow digital, culture, media and sport secretary Tom Watson added: “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. We need to make sure we sustain success in one of our most important creative industries.”
TIGA said many games developers found accessing finance a major challenge because they have relatively few assets and not much in the way of financial track records.
It added that most venture capitalists and business angels will not invest in games because of high risk and low knowledge levels about the industry and high, largely fixed costs of due diligence relative to the amount of equity sought.
The organisation said a VGIF would solve the access problem.
TIGA added that its research showed the VGIF would have a positive impact on the UK’s games industry and wider economy, and that the return on investment of £26.5 million over five years represented good value for money.
The report claimed that between 2019 and 2023 the VGIF would: increase the sector headcount by nearly 1500 staff; create more than 2700 indirect jobs; encourage games companies to invest an additional £215m in development expenditure; contribute £197m in tax revenues; help 175 studios (17% of total); and add £480m to Gross Domestic Product (GDP).
Ahead of the Budget, TIGA , as well as calling for the VGIF, is urging the Chancellor to reform the Apprenticeship Levy into a more general Training Levy and to make sure that video games companies have access to skilled foreign workers by keeping salary requirements for Tier 2 visas at competitive levels.
Dr Richard Wilson, TIGA’s chief executive, said: “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. The matched funding criteria would attract new investment 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 Tekes invested in the games industry, a return ranging from €9 (£7.97) to €26 (£23) has been generated.”
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