Games deep dive – Industry experts reflect on the trends & boundless future of investing in the UK’s gaming sector

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It’s an exciting time for the UK’s gaming industry. Prior to 2020, the sector was already booming; injecting more than £2billion into the UK economy and creating countless jobs in a range of diverse sub-sectors spanning development, publishing and merchandising. Then the pandemic hit – and instead of grinding to a halt, the video game industry evolved right alongside this uncertain period. People of all ages suddenly found themselves with more time to revisit and re-evaluate their relationship with the genre. Meanwhile, existing players retooled the way they interacted with familiar platforms, transforming their favourite games from button-bashing frenzies into therapeutic safe spaces where they could escape the news, socialise with friends and bask in a new world of ‘ambient gaming’.

It’s now 2021 and the sector continues to defy expectations. To explore this further, we teamed up with UKIE and UKBAA to invite a panel of industry experts to reflect on the market’s current trends and explain why now’s the perfect time for potential investors to support the creativity that exists on their doorstep. “There’s no better time to invest in games than right now,” reasoned Games Workshop and Hiro Capital co-founder Ian Livingstone who appeared alongside UKIE CEO Jo Twist, Mediatonic CFO Steve Tinkler, Curve Digital CEO John Clarke and Creative England’s CFO/COO Mehjabeen Patrick. “It’s an instant export story – it’s creating value out of ideas and it’s a regional success story too as it doesn’t rely on London, so there’s an awful lot to like,” he told viewers. “The risk profile has dropped enormously. Every technological advance that comes along increases the opportunity.

Bankability aside, it was Curve Digital CEO John Clarke who hit home the importance of expecting the unexpected from regional developers who emerge from obscurity to skew the sector into new and exciting places. “Big innovation comes from the companies that places like Curve can’t identify,” he suggested, detailing the impact small creative teams – affectionately coined ‘Unicorns’ – can have on large-scale games publishers like Curve. Thankfully, he was quick to assure us that the companies of tomorrow are being identified – and the ongoing pandemic has even helped set them up for promising and stable futures, making them a safe bet for new investors. “The amount of acquisitions that’ve been happening is unprecedented,” he continued, referencing the indie developers that have found success during lockdown. “Valuations have been going through the roof.”

Tonic Games’ colourful battle royale Fall Guys: Ultimate Knockout is a perfect case-in-point. Released just before the pandemic took over, it quickly became an unexpected viral hit. What’s more, it allowed parent company MediaTonic to see first hand how players had started using gaming as a form of escape and community, adding yet another potential revenue stream to an already successful sector. “The concept of ‘ambient gaming’ makes games very much an environment for people to come to – and rather than just being a game, it becomes a platform,” explained Tinkler, Tonic Games’ CFO. “I think that’s incredibly exciting – and from Tonic’s point-of-view, it’s something we’re very keen to build upon.”

This new way of interacting with games forms part of a larger social concept known as the ‘Metaverse’ – a virtual shared space where users can meet digitally with friends to relax, catch up and socialise. It’s a term that was regularly referenced during our panel and something that is sure to crack mainstream conversation as technology continues to advance and hardware becomes cheaper and more readily available. “Virtual production is a really interesting area because it incorporates artificial intelligence,” explained UKIE CEO Twist on the elements of the industry worth keeping an eye on. “There’s some really interesting things happening – and I’m personally very excited about the Metaverse. Fun is always going to be in high demand – and all these fundamental things that draw us towards play are never going to stop.”

With innovation at an all time high and new businesses working smarter and built to last, the UK’s gaming sector shows no sign of slowing – which is great news for potential investors. It’s a good place to be,” smiled Livingstone, as our panel discussion drew to a close. “People work extraordinary hard because the sector is full of opportunity. There’s an awful lot of baby Unicorns dancing around the fields of England – all you have to do is go out and find them.”

To find out more about investment opportunities in the creative industries, join our investor community. The roundtable dicussion was delivered as part of Creative England’s Creative Enterprise programme. You can watch this latest roundtable her as well as our previous roundtable discussions which explore the animation sector, here.