Culture Minister Ed Vaizey speaks about the recent success of the British videogames industry
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Thank you, I’m delighted to be back here.
We have come a long way since I first spoke at this conference in 2010.
Thanks to the hard work that everyone in the industry put in to convince the Chancellor and the European Commission, we now have a very successful video games tax relief, launched in April last year.
In its first 12 months, 67 games were certified as qualifying for the tax relief and between them these games have a total budget of over £180 million – almost all of which is to be spent in the UK or Europe. And new applications have really been flooding in over the last couple of months.
Thanks to the Next Gen report announced here five years ago, we have Computing back on the curriculum and are seeing the fusion of creative and technical education through the STEAM agenda.
I was also delighted last year to announce the new Next Gen Skills Academy, a powerful consortium of employers which will be targeting the next generation of games designers including through new entry level qualifications and apprenticeships.
After a successful first iteration, also announced here five years ago, we are now reintroducing an even more ambitious £4 million Prototype Fund to support video games projects, create jobs and develop games talent all around the UK. We will be launching the Fund very soon.
Over the last two years, Creative Skillset has been delivering match-funding for new skills initiatives in the games and other screen industries, including schemes like Trainee Finder. A further £4 million Government funding was announced in the March Budget to continue this important support.
Looking ahead, it will be vital to keep expanding the talent pipeline – Ukie’s Digital Schoolhouse project, funded by the Mayor of London, is a good example of inspiring children in creative programming from an early age – and training a new generation of teachers.
Industry itself has of course continued to change too – mobile continues to be a growing force, even more than we could have imagine just five years ago, and virtual reality, wearable tech, eSports and augmented reality are all coming into their own.
We now live in a world where Brighton resident PewDiePie can become the single most watched person on YouTube last year, attracting 4.1bn views, by sharing his experiences playing video games.
All this change is starting to yield real growth and success for the whole industry. There are now 33.5 million game players in the UK – 69% of 8-74 year olds. UK consumer spend on games was almost £4 billion in 2014, a 13% increase on 2013.
Overall, the UK games industry contributed £1.4 billion in GVA, generated £429 million in tax receipts, and supported 23,900 full time jobs in 2013.
Companies, from the largest to the smallest, are all clear that the tax break is helping projects go ahead that wouldn’t otherwise have happened, are acting as a real draw in winning investment from overseas, and crucially are helping studios hire more staff for their next project.
And it’s great to see that this growth and potential is being spread across the country.
Nesta and Ukie’s Map of the UK Games Industry last year showed just how much of an effect this change in the industry has brought about.
There are 18 actual and potential games clusters across the UK, with 12 of them already established. There has been an explosion of games companies in the last few years – the number of companies has been growing by 22 per cent annually since 2011, according to Nesta. This has been driven to a large extent by mobile, with up to 80% of new games companies every year being focused on mobile platforms.
This ability to form smaller companies focusing on different platforms has helped the spread of the industry to clusters across the country. Areas like Bristol, Leamington Spa, Dundee, Sheffield and Liverpool are all strong and growing hubs of companies - and I hear that exciting things are happening in Yorkshire at the moment.
Government-supported organisations are working hard to support games company growth in the regions. For example, in the last 12 months Creative England invested £1.2 million into 44 video games companies, creating 30 new games IPs and a great many jobs.
Credit must go to the BFI, too, for embracing the games industry through certification, as well as running video games conferences, and video cross media events. I know there is a lot more to come from them in this area as we go forward, and for us all there is still much to do.
We must also keep doing more to advertise the UK as a great place to make and sell games, and I know that Ukie have been working closely with UKTI and other agencies to put in place a year-round plan of events and activities, including inbound and outbound missions, as well as familiarisation trips for potential investors.
Allied to that, Government must also ensure that the tax relief is re-notified by Europe in 2017 and keep working hard to make sure the industry understands and uses it.
We will also look at the wider support for games as an important part of British culture, including the role of the BFI, the Arts Council, Creative England and other bodies.
I am also keen on recognising the value of diversity in the creative industries. There is perhaps more to be done in promoting diversity in the games sector workforce and I know that industry initiatives such as Women in Games are working towards raising the profile of this important issue.
For industry, as I’ve touched on, these are incredibly exciting times, with all manner of new developments coming to maturity, and so should another culture minister be on this stage in another five years - or perhaps even I will! - I have every confidence that the British games industry will have continued to go from strength to strength, and I look forward to being with you on that journey.