4 Other challenges facing the industry |
69. An innovative and talented workforce has traditionally
been one of the key selling points of the UK video games industry.
However, recent surveys have identified a lack of adequately skilled
employees as a priority issue.
70. NESTA told us that "the UK video games industry
has long complained about the low quality of specialist video
games courses at universities. Indeed, only 18 per cent of those
who graduated from these courses in 2007 managed to gain a job
in the sector."
Mr Livingstone, Life President of EIDOS, concurred: "so many
courses in the UK are, frankly, not fit for purpose. They are
generalist subjectsmedia studies, effectively, masquerading
as computer games studies."
71. Mr Rawlinson, told us:
[...] what we need to do is to get young people into
programming and the fundamentals of computer science and other
STEM subjects [...] and that will then flow through into the university
agenda and on into the work force. That doesn't necessarily need
more money; it needs more focus. We also need our industry to
be talked up rather than down.
Dr Wilson concurred:
[...] we need to increase the supply of good quality
computer science and mathematics graduates [...] we would like
to see measures taken by the Government to make sure that computer
science graduates and mathematics graduates pay lower tuition
fees than those on other courses.
Mr Livingstone believed that:
[...] the UK average is that 6% of universities
engage with local industry [...] we would ask any Government to
ensure that there is more incentive for universities to engage
with local industry. Abertay is a shining example of best practice,
and that should be replicated throughout the country.
Chris Chapman, the Director of Black Company studios,
based in Edinburgh, argued that:
[...] the tightening belts of the publishers and
financiers of the industry don't allow developers the leeway they
need to recruit and train new talent, and that hurts the industry
both now and in the long term.
He recommended "making it easier and cheaper
to hire talented but inexperienced staff" and "subsidies
for education and training."
72. In the course of our inquiry we visited the University
of Abertay, which is seen as a beacon of how successfully to equip
graduates for work in the industry.
Our visit confirmed the outstanding work which is being done,
and we were particularly impressed to see the work place simulation
being undertaken. The
innovative practices in place at the University of Abertay, such
as workplace simulation, the level support given to graduates
starting their own business and the level of cooperation with
local industry should be replicated across the UK. We recommend
that the Government set out in its response to this Report how
it will develop ways of encouraging the adoption of these practices
73. The shortage
of graduates adequately qualified to sustain the video games industry
in the UK is matter of real concern, as is the unsuitability of
many self-proclaimed video games courses. There needs to be more
focus on the hard skills needed for the industry, such as mathematics
and computer science. Other important factors necessary to ensure
graduates are both trained for industry and able to find a job,
are the levels of engagement between higher education institutions
and industry, and the incentives for industry to take on talented
graduates as trainees. The Department for Business, Innovation
and Skills should be able to demonstrate that it is aware of these
problems and has proposals to address them effectively. We recommend
that the Government's strategy for addressing such issues is set
out in its response to this Report.
THE £5 MILLION ABERTAY PROTOTYPE
On 14 July 2010, Ed Vaizey announced that a multi-million
pound investment project was to be launched at Abertay University.
Mr Vaizey said:
The first phase of the £5 million project is
a £2 million fund to invest in new computer games prototypes,
creating new businesses and giving fledgling companies the chance
to attract further investment by developing their intellectual
Grants of up to £25,000 will be available to
support the development of fully-working prototypes. Commercialisation
and project management support will also be provided from Abertay's
business and computer games experts, giving each successful applicant
the best chance of establishing or developing a thriving business.
Talented students and graduates will also gain important work
experience opportunities on project teams, further developing
the successful Abertay model of small teams working in the same
studio environment as computer games companies.
The project aims to create 30 new companies, provide
important support to another 80 existing smaller businesses, and
create up to 400 new jobs.
Financial support for the project came from the UK
Government (£2.5 million), the European Regional Development
Fund (£1 million) and the University of Abertay Dundee (£1.5
74. The £5
million prototype scheme, to be run by Abertay University, is
an excellent example of support targeted towards a priority issue
for the video games industry. We expect the Government to monitor
the progress of the scheme, and if it is successful, to explain
how it intends to ensure that it can be replicated nationwide.
LIVINGSTONE/HOPE REVIEW OF SKILLS
75. On 14 July 2010, the Government has announced
an independent review of education and training in the UK games
and visual effects sectors, to be led by Ian Livingstone, co-founder
of Games Workshop and Life President of Eidos, and Alex Hope,
co-founder of Double Negative,
and carried out by NESTA and Skillset. The review is expected
to conclude at the end of January 2011.
Mr Livingstone said the review would be:
[...] an opportunity to transform the UK into the
world hotbed of games production talent [...] we will be working
hard to deliver a blueprint for change in the UK's educational
system, so that our companies can access the kind of talent they
need to stay on top, creatively and commercially.
schools and universities provide the right education and training
is beneficial to graduates, businesses and the wider economy.
We support the Government's decision to commission an independent
review of education and training in the UK video games sector.
We expect the response to this Report to set out a timetable for
the Government's analysis of the review and for developing its
action plan for working with the Scottish Government on the recommendations.
77. TIGA's State of the UK Video Game Development
Sector report, published in 2010, notes that "over the
last year, 23% of developers said that some of their staff had
left them to go and work for developers overseas."
NESTA's 2009 report It's Time to Play noted that:
[...] the brain drain is a relatively recent trend
[...] it is clear from our results that government support is
now enabling studios in Canada to attract some of the UK's most
talented and experienced developers, who they target with generous
relocation packages. One in three respondents to this survey claim
that this brain drain will, over time, have a detrimental impact
on the quality of UK video games development.
skills shortage in the UK industry is compounded by a brain drain
to countries offering more generous incentives to the video games
industry. If the UK is to retain its position as a global player
in the industry, efforts must be made to halt this brain drain.
We recommend that the Government, in its response to this Report,
outline how it will work with universities and the industry to
ensure talented graduates remain in the UK.
Access to Finance
79. Access to finance is cited as a priority issue
for many industries, and the creative industries are no exception.
As Mr Rawlinson told us in evidence:
Any creative industry is a high-risk, high-reward
industry, and the video games industry probably stands at the
very top of that list of high risk and high reward [...] for normal
high street banks looking at that business, it is incredibly difficult
for them to assess the risk and understand the proposition.
Ian Livingstone expanded on the point, stating that:
[...] not just banks [but] private equity, VCs [venture
capitalists] and angels [private investors] still have trouble
understanding our industry, and quite right too, because it's
not just one format and one way of consuming content [...] with
diverse content device skills and budgets from a few hundred pounds
to £30 million, it is very difficult for anyone, even in
our own industry, to understand the economics, let alone outside
80. Mr Daniel Livingstone, School of Computing, University
of the West of Scotland, stated that "the production for
the games industry is such that a company may operate for many
months before receiving any income, and income may be irregular.
This can be problematic for opening business accounts."
81. The video
games companies face significant challenges in accessing finance.
More needs to be done to increase the understanding of the financial
cycle for video games companies amongst banks and private equity
funders. The Government has an important role to play in providing
support to businesses in attracting finance. We invite the Government
to outline in its response to our Report how this business support
is being tailored to video games companies.
Marketing and representing Scotland
82. In evidence, Ian Livingstone told us:
[...] there is a golden age of opportunity now for
games. Traditionally they have been high-cost packaged goods that
go at retail, and consequently, they have not been able to reach
global markets. But today, with the online world of network gaming,
social games, casual games and games that are played on iPhone,
small teams of people can get global audiences.
83. Both the video games representatives we met
during our visit to Dundee and written submissions highlighted
several measures needed to ensure the industry in Scotland can
benefit from this golden age of opportunity. Most notably amongst
the issues raised were marketing Scotland, adequate guidance for
small companies and representation.
84. Dr Richard Wilson, TIGA, concurred: "one
thing that we could do throughout the UK [...] is be much more
aggressive in marketing Scotland and the UK in general as a place
to do business."
He went on to say that "trade associations have a role [...]
and Scottish Enterprise, UK Trade and Investment, the Scottish
Government and the Westminster Government have a role."
Mr Rawlinson noted that "Having a Government, an education
system and a trade and investment department that really trumpet
our industry as open for business and open for capability will
give us the opportunity to lay our wares out and show what we
are capable of."
The Minister assured us that he was:
[...] very interested in ensuring that we have a
successful video games industry [...] I certainly think we need
to learn perhaps from the aggression of some of our competitor
countries in terms of their active wooing of different companies.
I think we need to be bolder in terms of going after organisations
and actively encouraging them to come here.
is open for business, and it is vital that this message is publicised.
We see the need for a more targeted marketing strategy to attract
investment to Scotland, and recommend that the Government work
with the Scottish Executive and trade associations to formulate
and implement such a strategy relating to the video games industry
in particular. We invite it to set out in its response to this
Report how it intends to do this.
86. Scottish Enterprise told us that "the companies
that have developed their own content and got to market have largely
done so as a result of personal networks [...] access to mentors,
either formally or informally, appears to be invaluable for companies,"
and this is something we heard about first-hand in Dundee. Notwithstanding
these personal networks, we heard that small companies "need
help and guidance [...] because they are creatives and they often
do not have the help in business that they need. They need to
partner with business people, they need access to finance, and
they need guidance."
87. This is
a "golden age of opportunity" for the video games industry,
with small businesses able to access global audiences. It is imperative
that guidance and support is available for these companies. We
recommend that the Minister for Culture, Communication and Creative
Industries holds regular meetings with companies from the video
games industry to develop and provide this support. We recommend
that the Government, in its response to this Report, set out its
strategy for engagement with the video games industry and its
underlying criteria to enable the video games industry to secure
there are personal networks within in the video games industry,
more formal representation at regional level could provide stronger
support for companies. We see an argument for a trade body representing
companies in Scotland, with the UK Government, trade associations
and games companies all involved in its creation. We invite the
Government to set out its action plan for such a body in its response
to our Report.
98 For example see: TIGA, State of the UK Video
Games Development Sector, 2010 Back
NESTA, The Innovation Game, Adjusting the R&D Tax Credit:
boosting innovation in the UK video games industry, October
Q 2 Back
Q 21 Back
Q 6 Back
Q 38 Back
Ev w 12 Back
Ev w 12 Back
DCMS and BIS, Digital Britain Final Report, Cm 7650, June
"Games industry jobs boost from £5m Abertay prototyping
project", University of Abertay, 14 July 2010, www.abertay.ac.uk Back
Ev 45. The review is due to be published on 1 February 2011. See
TIGA, State of the UK Video Game Development Sector, March
NESTA, It's Time to Play. A Survey on the impact of a tax credit
for cultural video games in the UK development sector, August
Q 48 Back
Q 48 Back
Ev w17 Back
Q 25 Back
Q 25 Back
Q 26 Back
Q 51 Back
Q 206 Back
Ev w5 Back
Q 25 Back