September 2021


Games Sector investment is equivalent to having a Hollywood blockbuster filmed in Warwickshire

The Creative and Cultural industries have been hit hard by Covid but one of Warwickshire's most vibrant sectors, Digital Creative, has broadly prospered with some areas seeing a boom and recruitment levels soaring. Warwickshire's vibrant Video Games sector has remained strong during the pandemic, as Warwickshire County Council's Digital Creative Lead, Stacy O'Connor explains.

Warwickshire’s long-established video game development sector is one of the largest and most prestigious clusters in the UK. Across Coventry & Warwickshire, there are over 80 games studios housing Entertainment, AR, VR & serious games specialists.

The main cluster of studios is anchored around Leamington Spa and many are within walking distance of the town centre, making it one of the most closely concentrated in the world. The cluster is predominantly focused on entertainment, creating successful game titles for console, pc & mobile devices, with a significant number of AAA title developers which have multi-million pound budgets to develop their games - this investment is equivalent to a Hollywood blockbuster movie being filmed in our county.

Leamington's long history of video game development has resulted in an organic growth of experienced veteran developers alongside new emerging talent which is no longer reliant on one big developer to sustain itself. This has built a supportive eco-system in which to operate, with a great mix of large, medium and indie developers, providing a rich mix of opportunity for any studios looking to establish themselves within the area. The thriving industry is also attractive for future employees who may choose to relocate to Warwickshire with its variety of career opportunities on offer.

The detrimental impact of the pandemic on large proportions of the economy is well-documented. Less reported is the positive news of the areas in which the economy has continued to grow and, in some cases, thrive. The video games sector is one of these sectors, particularly those developing for the entertainment market.

While 2020 was a difficult year for many, with impacts of the COVID-19 pandemic affecting nearly every aspect of daily life, homebound consumers turned to games for entertainment and as a way to virtually connect with friends and families. The UK market for video games reached a record £7bn in 2020, an increase of +29.9% from 2019, beating 2018’s previous record by more than £1bn.

Whilst we don’t have any official figures for the growth of the local sector, we do know that local businesses have experienced significant growth over the last 18 months. In February 2020 it was announced that the local studios collectively through new studios opening, and expansion were recruiting 500 new jobs over the next three years. The pandemic accelerated this growth significantly with the majority of the mid-sized studios (30–70 employees) increasing their headcounts during lockdown, and in several cases more than doubling it.

Due to restrictions and remote working, the sector has actually found recruitment easier in some cases, particularly where there have been high skills shortages, as the location of employees and relocation of overseas staff have not been the barrier they once were.

In January 2020, plans were announced for two new studios to join the 'Silicon Spa' cluster and, despite the pandemic, both studios have continued with their expansion plans and established studios within Leamington town centre bringing the prospect of 120 new jobs. We have been very pleased to welcome both Mediatonic and Electric Square to Leamington spa over recent months.

We have also seen an increase in enquiries to become part of the creative ecosystem within our region over the last 18 months. This was helped by the Department for International Trade highlighting the region as a High Potential Opportunity for Video Game Development, but we have also seen enquiries come directly to us based on the reputation of the cluster.

Due to the boom of the video game market there has also been an increase of overseas investors looking to take advantage of successful talent and IP being developed in the UK. A string of acquisitions has been announced in 2021 by some of the biggest global names in the sector which impact local studios.

  • Codemasters acquired by Electronic Arts for $1.2bn in March
  • Mediatonic acquired by Epic Games
  • Unit 2 Games acquired by Facebook Gaming
  • Sumo Digital acquired by Tencent for £900m in July

These four deals alone equate to over £2bn of overseas investment into the UK over a seven-month period. Adding to the acquisition of Playground Games by Microsoft Xbox in 2018 and Ubisoft acquiring Freestyle games, we have some of the biggest names associated with the industry based in the region, working on some of the most recognisable IP in the world.

It is a real success story though, of course, challenges remain. As studios consider how they return to offices, particularly with increased headcounts, demand for larger spaces within the town centres is proving to be a challenge for their expansion plans. Coupled with the increase in new businesses looking to locate within the town, we will need to work hard to ensure that we can continue to meet demand and maximise the opportunities this brings for the local economy. Smaller SMEs face challenges around R&D and attracting investment into their businesses, which is often misunderstood and deemed high risk.

We need to continue to support the wider eco–system, particularly for smaller studios who have the potential to grow. Continued investment into local infrastructure to support this growth is still needed, alongside the promotion of the cluster and maximising opportunities that arise. I am looking forward to continuing to work with and support this vibrant sector, and hope that the next 18 months are just as exciting.


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