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Examining the UK Gaming Market – Why the Country is a Major Global Player Despite a Dip in Market Value?

Examining the UK Gaming Market – Why the Country is a Major Global Player Despite a Dip in Market Value

 

The UK has long been a well-respected force in the global gaming industry. The country is home to high-quality games and innovative gaming technology. In addition, the UK gaming market is strong, with high levels of gaming-related spending.

This article looks at how the market has developed to its current strong position. We will also examine why the UK remains a big name globally despite a recent dip in spending and market value.

An Overview of the UK gaming market

An Overview of the UK gaming market

The UK’s game development industry began its growth journey in the 1980s. At this time, UK studios such as Ultimate Play the Game and Imagine Software emerged.

The industry grew rapidly during the decade, with UK developer Rare creating games for Nintendo and the UK also producing other top games such as Tomb Raider and Grand Theft Auto.

Since these early successes, the UK gaming market has continued to thrive. Today, studios like Rockstar North, Sports Interactive, and Traveller’s Tales continue to produce some of the most successful online games in the world.

Challenges for the Gaming Industry in the UK

Despite its success over more than four decades, the gaming industry in the UK faces major challenges. Three of these challenges represent the biggest threat.

The growth of digital increases the risk

As the digital realm expands, the threats it brings increase. These threats include account takeovers, ransomware attacks, threats to game integrity, and the opportunity for money laundering.

Overseas competition

Overseas competition

The global gaming industry has expanded as the UK gaming market has expanded. This overseas growth threatens UK gaming providers.

A good example of this is Microsoft’s proposed purchase of Activision, which the UK Competition and Markets Authority has tried to prevent, and the US court has temporarily blocked. However, Microsoft is convinced the takeover will progress.

Overseas operators are also a threat in other sectors of the industry, including casino gaming. People who want to play without the restrictions of the UK Gambling Commission often choose to play at casinos not on gamstop, which is not UKGC licensed. This removes potential revenue from UK operators.

Issues with bringing in new talent

There is currently a shortage of new talent in the UK gaming industry, which various factors, including Brexit and the global pandemic, have partly driven. The reduction in available professionals has led to an increase in salaries and has made the hiring process more expensive for companies.

A thriving gamedev community can overcome the challenges

There is a strong gamedev community in the UK. The community is located across the country and includes groups such as the Northwest Community, the Midlands Community, the Scotland Community, the Northern Ireland Community, and the Yorkshire Community.

Developers in the community collaborate with each other. They meet regularly, both face-to-face and online. Many of these meetings are informal, providing a relaxed environment in which to be creative.

The strength in numbers in the UK gamedev community, and the collaboration between members, means the gaming industry in the UK is strong enough to overcome the challenges it faces.

A dip in games industry value is a return to stability after unprecedented growth

A dip in games industry value is a return to stability after unprecedented growth

Despite its strength, there has been a recent reduction in the value of the UK gaming market. In 2022, the market was valued at £7.05 billion. This was a dip of 5.6% in 2021 figures.

However, the figure is still 17% above pre-pandemic levels. So, the drop in value represents a return to stability after a period of unprecedented growth rather than a significant ongoing problem for the industry.

It’s also worth noting that spending on gaming software increased by 0.4% to £4.57 billion, with expenditure on mobile software up by 11% to £1.43 billion.

The flip side is that gaming hardware spending was down by 19% to £832 million. This decrease is not unexpected given that sales declined similarly two to three years after previous new-generation consoles hit the market.

Despite the shrinking UK video game market from 2021 to 2022, it’s still healthier than pre-pandemic levels, and there is good reason to be positive, given that a recent study showed that 72% of adults in the UK say they play video games every day.

Plus, it’s interesting that charted against consumer spending figures for the last decade, the valuation of the industry in 2022 meets with pre-pandemic expectations.

Given this information, it seems that the recent unprecedented increase in value was unexpected and probably due to an increase in video game play during the pandemic.

It remains to be seen how the value of the industry will perform in the coming years. However, it’s important to understand that trends in the gaming industry are changing.

For example, there is a trend for bigger games that take longer to produce and are more expensive to create. In addition, the new generation of consoles is also more time-consuming and costly to produce.

These trends mean that the slower rates of production that occurred during the pandemic would likely have happened anyway and will probably continue.

It remains to be seen how slower production rates will affect the industry’s value, but there is no doubt that there is still a strong appetite for games in the UK. This appetite should sustain a high level of expenditure on gaming in the UK as well as promote the growth of the gaming sector in the country.

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