With the UK voting to leave the European Union, Game Rant takes a look at what this could mean for the many UK-based video game developers and publishers.
On Thursday, the United Kingdom took part in a historic referendum on whether to leave the European Union. The result, by a majority of 52% of the votes, is that the UK is set to leave the bloc. Already, there have been some serious ramifications for businesses within the UK, with the pound dropping to its lowest level against the US Dollar in over thirty years, and numerous banks and construction companies seeing their share prices plummet.
Of course, the long-term effects will be felt across the region by both the people of Europe and businesses within the continent. Among those preparing for life with the UK outside of the European Union are several companies within the video game industry. The UK is home to a number of acclaimed developers and publishers, including the likes of Sniper Elite developer Rebellion and acclaimed strategy studio Creative Assembly, and many major publishers hold offices in the UK. Just how could this result impact upon them, and upon gamers themselves?
In the short-term, UK-based companies look to remain resolute in the face of this uncertainty. UKIE, the organization that supports the UK games and interactive entertainment industries, offered up a statement after the result of the referendum was revealed, stating that “it is important to remember that we are already a globally successful sector and a leading exporter in the digital economy.” Although there was clear concern for the “political uncertainty” brought about by the result, there is a positive hope for the future, providing that the United Kingdom continues to provide the “best possible business environment” for the industry.
Whether the environment remains the same, however, is yet to be seen. At the moment, developers can receive certain benefits, such as a tax relief scheme that allows companies to claim up to 25% on their production costs. The relief package, which is outlined at gov.uk, has proved tremendously successful in continuing to keep the UK as a big player in the world of gaming.
Other creative industries have seen cutbacks due to austerity measures in recent budgets, with the film industry particularly hard-hit, and many developers will be hoping that a similar fate does not befall gaming. With David Cameron resigning as Prime Minister, his successor and the subsequent cabinet could put into action changes to funding – particularly given Chancellor George Osborne’s warning of an emergency budget being required.
Longer term, however, there could be larger ramifications for the creative pool of the country. UK-based developers are a melting pot of different nationalities, with devs from varied backgrounds and nations congregating in the UK to make good use of the country’s foundations in the video game sphere. During negotiations on the UK’s separation from the EU, the issue of free movement is bound to be a contentious topic, and as a result there is the distinct possibility that restrictions may be placed on workers coming in to the UK video game industry. Piers Harding-Rolls of IHS Technology told Eurogamer that “the vote result may undermine the ability of UK-based developers to acquire talent from the EU.”
In addition to this, UK residents may well find chances to break into the industry, or cement a strong place in gaming, becoming increasingly limited. One of the unsung opportunities given by the European Union falls directly to video game developers. The union, through its Creative Europe scheme, offers up substantial grants to the arts, and provides €3.4 million specifically towards the creation of games.
Of this, the UK has been a large beneficiary. In 2015, the United Kingdom had the largest allocation of this funding out of all EU nations, with a number of companies making good on the EU’s promised grants. Successful applicants included Broken Sword developer Revolution Software, and The Chinese Room, which achieved huge critical success (including BAFTA Awards) for acclaimed narrative title Everybody’s Gone to the Rapture.
It is unlikely that UK developers will have Creative Europe available once the United Kingdom exits the European Union. As such, developers after substantial backing may have to look elsewhere to gain support for projects – and some may be unable to complete games other than purely on a passion basis. The UK currently has an extremely strong independent development market, including the likes of Not A Hero and OlliOlli developer Roll7, and it would be a shame to see such grants disappear without a UK-based plan acting as a successor.
What’s more, those honing their skills in video game development may also see extended chances to learn harder to come by. Information and Computer Technology studies in the UK receive a full 33% of their funding directly from the EU. Alongside this, Technology in general also received 25% of funding from the union. As such, this shortfall in funding for technological industries may need to be addressed – although exactly where this funding will come from remains to be seen.
Thankfully, it’s highly unlikely that gaming will ever cease being an important industry in the UK. Video games are in the country’s blood, from Tomb Raider through to Grand Theft Auto, and GoldenEye 007 to LittleBigPlanet. Adversity will not diminish the country’s desire to make games, and with Minecraft free for school students in Northern Ireland, further generations will no doubt be inspired to make games of their own, whether the UK belongs to the European Union or not.
One other bone of contention, however, could be exactly what happens to external companies that have offices in the UK. Understandably, the United Kingdom has proven to be a perfect place for publishers to hold offices, particularly in London and the surrounding area. Financial instability could put off multinational investors, with uncertainty over the nation’s trade agreements with the EU. Scotland could provide a shining light for those currently working in the country, however, given that it has already been suggested that the nation is likely to have another referendum to split from the UK itself in the coming years.
These trade arrangements could have an knock-on effect for the price of both games and consoles in the UK. Given that the manufacturing of many physical copies of games happens within the EU, the retail cost of these games for users may well increase, depending upon exactly how the UK government negotiates trade tariffs. That said, gamers could also be in for a surprise – the price of games may actually drop.
Given the weakness of the pound, digital copies of games could end up actually costing less for players than at the moment, and should a positive decision be made regarding trade tariffs, then physical copies could also come in at the same or even a reduced price. However, it’s not all good news. Harding-Rolls has also suggested that hardware prices may increase – meaning gamers hunting after the upgraded PS4 or Xbox’s Project Scorpio may have to pay more than their EU counterparts.
Of course, it’s still very early days when it comes to the UK’s detachment from the European Union. It will take years for the move away from the EU to fully come into effect, and those years will no doubt be filled with trepidation from gamers and industry professionals alike. Hopefully, the UK gaming scene – much like the country itself – is able to come out of this upheaval stronger than ever, and ready to take on a new role worldwide.