Over the past couple of years, there’s been much coverage within the games-industry press about the fall and fall of the UK games industry. Nicholas Lovell has done a particularly good job of tracking studio closures. Many of the big companies, and the trade associations, seem to have spent most of their time trying to win tax breaks.
The argument has been: It’s impossible for AAA studios, with hundreds of employees, to stay “competitive” with Montreal, Vancouver, et al – unless the government gives them vast amounts of free profit. If they are not gifted this money, they will shut down, and make people jobless; witness NIcholas’s Job Loss Tracker above for evidence.
But the thing is … I really don’t care.
I really don’t believe we “need” those big studios.
(EDIT: NB: this post was sparked by Andy Wilson of Codemasters stating: “we need to start supporting the industry properly or the whole thing is going to melt into iPhone developers – and there’s only so many 4-man teams who are going to find success”. Of course, Codemasters is a great example of a badly-managed, has-been publisher that chews people up and spits them out)
If they cannot make the same high profit margins that those of us skilled and bold (foolish?) enough to do iOS are making, then they’re just getting in the way, and should sod off.
How many iOS studios were whining about the need for tax breaks?
How many were just being quietly profitable, and focussing on being “more profitable through good solid product and marketing”, rather than begging government to do it for them?
I welcome the demise of bloated, badly managed, unprofitable, second-rate console studios.
I also believe that console studios will return – but they’ll be offshoots of iOS studios, and they will be managed a million times better. Let’s forget the old studios, and their shitty business acumen, their mismanagement, and piss-poor leadership.
Good riddance, I say.
(unless they continue to be healthy – in which case: well done, and what a great asset to the community and industry! I judge them by their success, not by their ability to chew through people and resource as inefficiently as possible; it often seems in the press today as though the latter is the most important criteria :()
7 replies on “We don’t need no AAA console studios”
I have to agree. The amount of bleating that goes on about tax breaks really pisses me off at times, especially when it comes from companies that are living in the past and would probably be mediocre or fail regardless of tax breaks. Knowing some of the things you can get grants for, government / local government funding s already quite generous in places. Fine, we’re at a disadvantage compared to the likes of Canadian studios, but it’s not the end of the world.
My list of two things I’d never invest in:
#1: Football clubs
#2: Old style games development
I don’t think you’ll see any even moderately sized studios set up. And yes, the social gaming sector IS limited.
With tax breaks we’d have had several billion more, at least, invested in this country (ATVI would have formed a new studio rather than pulling out, for starters).
There can’t be a “new style” studio of any size, the funding isn’t there and won’t be there without tax breaks to leverage against. It’s taken film a decade and a tax break identical to the one which the games industry was to have for it to build up to the point of actually being able to do more than small and piecemeal work and to get the big funding again (and it’s been set back nastily by the government too).
The UK will keep falling in terms of game development done here, and I can’t see how you think this is a good thing.
Recently plucked from another conversation, a trivial famous example nearby:
Acrossair, grown in just a few years from around 15 staff to around 60, based on iOS success.
How big is “moderately sized”?
All I hear from console-studio-loving people is “you’re mad! It’s IMPOSSIBLE to build a big studio from a small one!”, and never anything remotely resembling facts or data to back that up.
It’s a bizarre claim to make in the first place; where do you think the big studios came from? And they did so at a time when the financial income of the industry was literally 1/3 the size it is now. I remember back in the Bullfrog days when a “best seller” game was one that hit “more than 750k sales”. And those figures grew Bullfrog to a 40+ studio that sold to EA.
Nowadays, the market is many times larger, it’s many times cheaper to build new IP, people in the industry are many times more experienced at marketing, sales, business, etc. And yet, strangely, people still seem to think it’s “IMPOSSIBLE!” for small iOS studios to grow into big ones.
Shrug.
Zynga says “hi!”.
And where are Zynaga’s growing studios? Canada, China and India. Acrossair are not in games, which means they’re not going to be viewed the same way for attracting funding.
And yes, the smaller studios grew at times where the industry was expanding much more rapidly, capital was more available and there were market niches clearly unclaimed, or insufficiently challenged.
Really adam, I’d expect better than that for a response – I said they’d not grow in the UK, not that they’d not grow. If companies grow now, it’ll be in places where they can leverage tax breaks to interest financiers, as I said.
I admit I have a selfish interest in this as a designer – I’d prefer to work with a larger company full time, rather on contracts with smaller companies who are not paying up either on time, or in some cases at all.
(“Oh sorry we went bust last week, gl with the bill” is something I’ve heard a half-dozen times in two years now!)
incidentally – if you go to http://www.ilovecrunch.co.uk (my mobile browser assumes the www), you get an error message, “The config file for the specified host is not under an allowed path”
t-machine just removes the www from the web address and works fine.
@andrew
I’m surprised that you think that investors will only invest if tax breaks are available. Certain types of investors, certainly (some high net worths, some public market investors), but I’ve spoken to or consulted for a number of different types of investor (VC, growth equity, later stage) and tax breaks are never the issue.
It’s about whether the company can grow, management understand metrics, whether there is visible traction etc.
I really don’t think that most tax breaks interest financiers. They interest big companies (which is a different thing), and in many cases its about transferring UK (or Canadian) taxpayer money to the shareholders of US or French corporations.
I’d prefer to see our taxpayer money spent on providing a better playing field for all startups and innovative businesses, not propping up failing industries.
Nicholas –
May I ask WHY you think so? Because my experience is based on both ATVI’s actions and two attempts to fund games-related companies which I was involved in, plus extensively talking to financiers.
The games industry as a whole is widely viewed in the UK as “failing” by those people, and for good reason. No, that’s not going to bother small teams who can go to their local bank for the funding they need, but anything larger? Forget it.