TIGA has published a new report calling for the establishment of a UK Video Games Investment Fund (VGIF) to support the growth of small and medium-sized studios in the sector that are suffering from poor access to finance.

The report, “Sustaining Success: A Video Games Investment Fund (February 2023)” analyses industry survey data, international comparisons, and economic modelling to outline the case for a VGIF.

TIGA says that difficulty accessing capital has consistently been one of the top factors holding back many games developers in the UK. UK games studios often find it difficult to raise capital for growth. This financial challenge means that many small, start-up and innovative companies struggle to scale up and are vulnerable to closure or collapse. It can also lead to founders selling their studios before they have had an opportunity to achieve sustained growth.

TIGA says that the VGIF would address this funding challenge by providing funding of between £75,000 and £500,000 to games developers nationwide. Funding between £75,000 and £100,000 would be delivered as grants while allocations above £100,000 would require companies to match pound for pound to ensure that games companies find new investments from other sources.

Further, TIGA says, the VGIF would disburse £5 million in match-funded loans and grants to up to 35 different UK games developers per annum. The Fund’s operating costs would include the provision of investment boot camps by industry specialists for all recipients and commercial mentoring by paid industry veterans for all loan recipients. The VGIF would also actively promote loan recipients to investors.

The report calculates that the VGIF, costing an aggregate £26.5 million over five years, would yield a net tax contribution to HM Treasury of £56.5 million (i.e., a 213% return on investment by 2027) and would benefit the UK’s games industry and wider economy yielding the following impacts:

• 512 new full-time development roles would be created by 2027 (out of an industry total of 34,921 overall);
• 936 new development support roles would be created between 2023 and 2027 (63,845 overall);
• £91 million in additional investment by studios between 2023 and 2027;
• £83 million in additional tax receipts to HM Treasury would be generated between 2023 and 2027; and
• £201 million in additional GDP would be generated between 2023 and 2027.

To read TIGA’s press release in full, click here.