UK Video Games Market Is At £7Bn Record High Due To Lockdown
The video game lockdown boom has put the global success of UK game makers in the spotlight, drawing the attention of US giants looking for valuable pandemic-proof deals. The California-based games giant announced a $945 million bid for Codemasters, the world’s largest video game publisher. EA’s offer, recommended by the board, is an approach that accommodates – or leaves to – the game maker, which last month submitted its own bid for the games, including Stars Wars Battlefront 2 and Battlefield 4, both expected to join the bidding war in a sweet deal.
Since the introduction of tax relief in 2014, £3.7billion has been spent on making the 1,375 video games that make up the aid claims. In August, the Government revealed that it had spent £355 million to produce more than 150 video games in the UK, claiming tax relief by the end of March.
Industry veterans were not surprised by the recent boom, pointing to Britain’s ability to develop world-class games. Even games released after the pandemic have performed well, with games like World of Warcraft, the World Building Game, and Star Wars: The Old Republic breaking sales records at launch.
To make video games as compelling as possible, the strategy was to take on the monetization of games. Subscriptions have given small games the marketing and monetization they otherwise did not have to penetrate the mainstream.
Cloud gaming allows consumers to play streamed games on any device, often without expensive hardware. At the same time, these business models have made video games more accessible than ever to a wider range of consumers.
While cable networks seem to be filling the air time that once belonged to the past – that is, the discontinued traditional sports program – the sport is being fueled by a growing interest in the sport, especially among younger viewers. Several sports competitions were shown on television screens across the country, with broadcasters trying to record hours of scheduled sports content that was canceled after the pandemic.
NASCAR was among the canceled events, with one event reaching a peak of 1.3 million viewers. The pull of YouTube, which generates 120 million active users each month, is hard for other entertainment sectors to ignore.
Delays in games are not uncommon in the industry, and Ubisoft and CD Projekt Red have both announced delays in prominent titles. Sony Interactive Entertainment and Sony Pictures Entertainment have already announced delays in the event of a pandemic. Greater interest in gaming could accelerate the adoption of cloud-based platforms such as Amazon Web Services (AWS) and Microsoft Azure.
Games fans were joined by millions of newcomers looking for entertainment at home, which meant £1.6 billion more was spent on games than in 2019. The closure has also prompted consumers to experiment with new games such as Animal Crossing: New Leaf, which climbed 29% to an all-time high of PS129m. Animal Crossing backed the public scramble to get their hands on the latest and best video games in the wake of the terrorist attack. Overtaken by Star Wars Battlefront 2 and Star Trek: The Old Republic, it has helped fuel the growth of video game sales in Europe, North America, and the Middle East.
With evidence that cheap entertainment tends to flourish in recessions, cheap, high-quality offerings are a serious way to expand the gaming industry. Although the emissions are linked to the continued growth of gambling, they are also relevant in the context of the UK’s economic downturn.
The hallmark of the UK gambling industry is a remarkable geographical diversity that is second to none in the UK. Ukie identified 23 in Crawley and Horsham, where game developers have created jobs that have added an extra £60m to the local economy.
The biggest revenue market is Asia-Pacific, but Ward says the biggest gains are expected from mobile games, with China playing a key role in the growth of the UK online video game market. Indeed, EA’s foray into British gambling is just the latest example of foreign companies exploiting an opportunity for a land grab. An early proof of this is the state of Nevada, which has legalized betting on competitive gaming.
Apart from social measures, the consequence of COVID 19 for gambling was a massive expansion of the audience available to publishers. The government’s tax breaks, which have attracted content such as Star Wars Crown to the UK, have also helped boost the gaming industry. In the future, as new games are released and the industry attracts new converts, there will be more partnerships with the entertainment industry more broadly, with media companies trying to capitalize on all the momentum that gaming has generated. What’s next: What will happen in the future and what’s next?
Given that emission allowances account for less than 1% of the gaming market, this would be an existential threat to the entire industry. While Pachter sees core players reducing their game strength to an end, he believes the long-term value for the industry is attracting new fans from outside its customer base.