T.locking down in video games has highlighted the global success of British game makers, drawing the attention of deep US giants seeking to seize valuable businesses that are fighting pandemic.
California-based global game giant Electronic Arts has announced a staggering £ 945m bid for Codemasters, the maker of Formula One racing games.
EA’s offer, recommended by the Codemasters board, is nearly £ 200m more than was submitted last month by rival Take-Two Interactive, the games maker the introduction of Grand Theft Auto, which is expected to return to the bidding war with a sweeter deal.
The game industry has been a coronavirus winner, with tens of millions of customers looking for relief from lockdown and a British pedigree ensuring that enthusiastic investors put stocks up to above.
The number of UK game developers listed on the London stock market, including Warwickshire-based Codemasters, has all risen in share prices by more than 100% this year.
Industry veterans will not be surprised with the latest rise, marking Britain’s history in creating world-class games.
“The UK is a highly creative nation that has led the world in film, TV, fashion, advertising – and games as an exception,” said John Livingstone, chairman of games developer Sumo Digital, co-founder of Workshop Warhammer Games and the wonder multimedia creator. “In the 1980s there were titles like Elite and Populous, when game consoles arrived in the 1990s, Tomb Raider and Grand Theft Auto, and now with mobile platform games like Fall Guys and Golf Clash. The UK has been responsible for creating many global rights but often outside the industry there is no value. ”
In fact, EA’s exploration into UK games is just the latest with foreign companies spying on land takeover. More than a decade ago Sega Japan moved to acquire Sports Interactive, Islington studios behind Football Manager and Competition Manager, and Creative Assembly, which makes titles including the series. Warhammer: Total War. The clock rolled back 20 years and it was the New York-based Take-Two, currently in pursuit of Codemasters, that captured DMA Design, the Scottish developer behind Grand Theft Auto and Lemmings.
In addition to the rise in game play, the ability of developers to continue to operate practically unhindered from the virus is an important reason for investors who want to support businesses that are fighting pandemic. According to the Ukie industry trade group, during the pandemic games manufacturers maintained an 80% to 90% yield, none of which accounted for a revenue decline and a quarter had encouraged employee numbers to keep up to the application.
British maker Fall Guys, the online multiplayer athletic competition in the style of Teletubbies that has become a global phenomenon, needs to triple the workforce.
“When Fall Guys was released in August we had a core team of about 35 people on the project,” said Dave Bailey, co-founder of developer Mediatonic. “Nothing could be prepared for what would happen. The game sold over 11m copies on PC and became the most downloaded PlayStation Plus game in history within about 60 days. We now have almost 100 people working on Fall Guys. ”
While the headline-grabbing mobile version of Netflix and Spotify is catching the headlines, at £ 4bn the gaming industry is the same size as the combined music and video markets in the UK, according to the Association Entertainment Vendors. The UK video game industry is the largest in Europe, and the fifth largest in the world, behind the gaming juggernauts of Japan, South Korea, China and the US.
“There is a lack of capacity in creating high-quality game content,” says Neil Campling, media analyst at Mirabaud. “Like a film, a high-profile title can cost $ 100m-plus and take up to four years to create. But with physical and digital routes to market, and players buying add-ons, if you get it right the margins mean it can be a license to print money. We’ve been predicting unions and gains in a game for a while, we’re seeing the beginning of a wave. ”
Government tax relief which has received billions of investments from companies such as Disney or Netflix to produce content from Star Wars or The Crown in the UK has also helped lead the gaming industry.
In August, the government revealed that £ 355m had been spent making more than 150 video games in the UK seeking tax relief in the year to the end of March. Since the introduction of tax relief in 2014, around £ 3.7bn has been spent making 1,375 video games that have made relief claims.
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The hallmark of the UK game industry is a remarkable geographical diversity unmatched by any other creative sector in the UK. More than 50% of the 50,000 strong staff employed in gaming in the UK are based outside London and the south-east. None of the five game companies listed on the London stock market are headquartered in the capital, instead choosing locations including Sheffield, Wakefield, Cambridge and Codemaster’s center in Southam . GTA’s global franchise continues to be creatively directed out of Edinburgh, with Take-Two’s Rockstar North unit.
Wakefield-based Team17, the 30-year-old publisher of Worms favorite, says in the global world of games there is no withdrawal in local work.
“I’ve worked for a number of companies in the UK and also overseas,” said Chris Coates, studio head at Team17, sporting a Christmas jumper via Zoom’s call from his home in Leamington Spa. “I’ve worked at startups where we didn’t have much office space. We may think we are in a very small bubble in Wakefield but we are a globally connected company. we have [employees] from all over the world. ”
Ukie has identified 23 towns and cities across the UK – from Newcastle and Leamington Spa to Crawley and Horsham – where game developers have created major economic jobs adding up to £ 60m to the local economy .
“We are not based in London like other creative industries,” said Jo Twist, chief executive of Ukie. “The government is looking to ‘level up’ the economy across the country, a term that comes from games, you could say that we as an industry are already experts. ”