Recently, the British government launched a 40.5 million USD or 30 million GBP game development fund. This initiative is pledged to expand the UK Games Fund (UKGF) and strengthen the ecosystem of UK game development services.
But what does that mean for businesses operating in the UK?
Does that mean that the businesses would benefit from this?
The UK Games Fund (UKGF) aims to boost game development through funding, skill-building, and IP support. It reduces risks for startups, strengthens investor confidence, and is expected to generate £30–50M in economic benefits. With trends like AR/VR, AI, Blockchain, and cloud gaming, the fund positions the UK as a global leader in the gaming industry.
Do you want to explore more of these? Let’s go!
What does this Game Development Fund mean?
Along with this Game Development Fund, the government has also established the UK Video Games Council.
Who are parties to the UK Video Games Council?
It comprises industry representatives of the gaming market. This council aims to establish close links with Whitehall, while driving growth in the British creative industries.
A 510 million USD package will also be injected into the creative industries like advertising, gaming, film, music, and so on.
There is also a possibility that a UK Games Skills Network will be established. This will address the skill gaps in the game development sector.
Lisa Nandy, the Culture Secretary, said that this fund will stimulate investments, create employment, and boost economic growth.
Nick Poole, the CEO of Ukie (one of the UK’s world-leading video games and interactive entertainment companies), also stated that they welcome this step taken by the government to supercharge this sector.
TIGA CEO Richard Wilson added that the video game domain provides high-skill jobs. This domain further boosts the UK economy. This fund will further encourage the growth of small studios.
But the question of the hour remains.
What is the structure and objectives of the UK Games Fund?
Simply put, UKGF’s goal is to support the game development sector in the UK by skill development, creating new jobs, and developing new IP (Intellectual Property).
What are the objectives of the UK Games Fund (UKGF)?
- To help game startups and entrepreneurs by supporting prototype funding, follow-on match funding, private debt, and EFI (Equity Finance Investment).
- To improve investor perceptions about digital IP and promote high intellectual property housekeeping standards.
- To encourage talented game developers and designers.
How does it matter to Businesses in the UK?
Now that we know about the UKGF or UK Games Fund, let’s see why it matters for businesses in the UK.
According to a report by Alma Economics, the UKGF is expected to generate 30 to 50 million GBP (40.6 to 78.5 million USD) in the form of productivity benefits for the British economy.
The report even suggests that the benefit-to-cost ratio will be between 3.8 and 7.3, with a central estimate of 4.8. Along with that, the report found that there will be a substantial increase in the number of jobs in the UK’s video game sector.
So, how will the UKGF help the businesses in the UK?
It’s inappropriate to consider UKGF as a grant. It’s more about creating a sustainable ecosystem that reduces risks, boosts investor confidence, and bridges the skills gaps, which ultimately help UK businesses in the game development industry grow stronger and faster.
Let’s explore that in a little bit of detail.
1. Funding and Risks
- The UK Games Fund offers match funding, equity finance support, and prototype grants, which help startups develop games.
- This reduces the financial risks for emerging game studios and makes them attractive to investors.
2. Investor Confidence
- By encouraging high standards of Intellectual Property management, the UKGF makes game studios more credible.
- This credibility draws capital and accelerates business growth massively.
3. Skill Development
- With the proposed UK Games Skills Network, the skill gaps in the game development industry will be addressed.
- Businesses will gain access to skilled developers, making the hiring easier and projects sustainable.
4. Job Creation and Economic Growth
- The fund will promote employment across creative industries, including game development.
- As it has the potential to generate 30-50 million GBP in productivity benefits, for every 1 GBP invested, the returns will be 5 GBP in value. This will benefit businesses directly.
5. Industry-Government Collaboration
- With the UK Video Game Council linking industry and government, the policies will better match the business needs.
- This can create a sustainable ecosystem where businesses can grow with clear regulatory support in the game development industry.
Business Opportunities for Game Development
Gone are the days when video games were considered a part of the recreation industry. Today, the game development industry is booming and has quickly evolved into a billion-dollar powerhouse.
So much so, the revenue generated from the game development industry was almost 455 billion USD globally.
So, in this section, we will be exploring the most profitable business models in the gaming sector. Whether you’re planning to invest in the gaming industry or create your game, understanding these models will give you an overview of the business opportunities in the gaming sector.
1. F2P (Free to Play) Games with IAP (In-App Purchases)
As the name suggests, this model offers free games. However, the monetisation takes place through in-game purchases. The IAP includes extra lives, power-ups, exclusive characters and items, and in-game currencies.
(Source: Clash of Clans)
Why Free to Play games work?
These games lower the barrier to entry. This means anyone can download and start playing these games. Once users become sufficiently hooked, certain players will pay for the extra features. These players are called Whales in the gaming industry. These whales contribute a major part of the revenue.
2. Ad-Driven Monetisation
These games are completely free. However, the revenue is generated from online advertisements. The ads include:
- Ads appearing between levels (interstitial ads)
- Ads that need to be watched between power-ups and earn extra coins (Rewarded video ads)
- Constant ads at the top or bottom (Banner ads)
Why does Ad-driven monetisation in video games work?
The ads in these games generate all the revenue. The advertisers pay the game developer or the game development company for every click or impression. This way, the advertiser promotes their products, the developers get paid, and the players get rewards. So, it’s a win-win situation for everyone.
3. Subscription-Based Games
In this type of model, the players pay a repeated fee (annually, monthly, or weekly) to access premium features of the game, such as an ad-free gaming experience or exclusive content.
(Source: Roblox)
Why do subscription-based models work?
Firstly, it generates recurring and predictable revenue. Secondly, it improves user retention through a superior gaming experience. Plus, it provides a long-term value for publishers and developers.
4. Premium Games
P2P (Pay to Play) or premium games are based on the traditional gaming model, where users are asked to buy the game upfront. It cannot be played for free.
(Source: The Witcher)
Why do premium or pay-to-play games work?
Although it limits the audience to users who pay, it appeals to players who prefer a quality gaming experience and want the game ad-free and free of other microtransactions. However, this model presents certain challenges.
It requires higher user-acquisition and marketing costs.
It has limited user value (lifetime) unless combined with expansions or DLCs.
5. P2E (Play to Earn) and Blockchain Games
Players can earn assets in the form of cryptocurrencies or NFTs by playing these games. These assets can be sold or traded outside the game.
(Source: Axie Infinity)
Why Blockchain games work?
Firstly, it empowers users to monetise or acquire in-game assets. Secondly, it increases investment and engagement in the gameplay. Most importantly, these games attract gamers and crypto-enthusiasts alike.
However, there are certain challenges associated with these games.
- It must comply with the region’s regulations.
- The volatility in the crypto market can be an issue here.
- The games require a scalable and secure backend.
6. Real Money Games
These are the games in which the players risk real money. This way, they get a chance to win cash based on skill, chance, or performance.
(Source: Rummy Circle)
Why do real money games work?
The chance to win real cash allows higher user engagement and retention. Additionally, it works on direct revenue generation. These games provide an easy integration with payment gateways and digital wallets.
The Future of Game Development in the UK
With the UKGF, the future of game development in the UK looks bright. However, the future of game development in the region is shaped by various technological trends. These trends are set to revolutionise how the games are developed, experienced, and played.
1. Immersive Experiences through AR and VR
Through AR and VR in-game development, immersive experiences can be provided for gamers. While Virtual Reality allows an immersive experience in gaming, Augmented Reality overlays elements onto the real world. So, through these technologies, games can be developed that provide highly interactive and engaging experiences.
2. AI (Artificial Intelligence)
AI is transforming the gaming industry. PCG (Procedural Content Generation) enables the creation of dynamic games with minimal manual input. AI-oriented characters show adaptive and more realistic behaviours, which enhance the gamer’s immersion in the game. Plus, AI is used to personalise the gaming experience based on players’ preferences, making the games more engaging.
3. Cloud Gaming
This technology allows online game streaming. Cloud gaming eliminates the need for powerful hardware. It makes high-quality experiences accessible to a wide audience. Hence, it promises to make gaming more convenient and accessible.
4. Blockchain
The NFTs and Blockchain technology are transforming the game development industry. It can allow true ownership and secure transactions of in-game assets. The NFTs allow gamers to own unique items that can be sold or traded. This adds a new layer of engagement and value to various games.
5. Interactive and Social Experiences
Games today are becoming more and more social and interactive. This is done by integrating features that allow gamers to collaborate and connect with other gamers. In-game events, live streaming, and social VR spaces are creating new avenues for gamers to engage with the content and each other.
How to Choose the Right Game Development Services in the UK?
While determining the project requirements and scope is the foremost step, other factors are responsible for choosing one from a huge number of UK game development companies.
1. Experience
Before choosing a game development studio, gauging their expertise and reputation is important. The company must have a team of expert developers. These experts should be capable of designing high-quality games that satisfy user requirements. Along with that, the firm should have experience working on a wide variety of projects and should use the latest technologies and trends.
2. Creativity
Creativity is what fuels innovation to create an outstanding gameplay and an intriguing storyline. Unique features in the game environment will make it interactive and stand out from other games in the same genre. So, looking for creativity in the game development company can make your game innovative, which cuts through the noise.
3. Technical Expertise
To use the latest technologies and tools, the team must have high technical skills. So, look for a company that has extensive technical knowledge in various areas like programming languages, graphics, game elements, and game engines.
4. Transparency and Flexibility
A good game development studio should keep you updated on the development process. This will mitigate any restriction on cost or time. Other than that, the company should be flexible enough to accept the changes you require. This way, trust can be achieved between the company and your business.
Webskitters Ltd.: Exceptional Game Development Right at your Fingertips!
The game development industry isn’t about recreation anymore. It is more about creating something in which people socialise, express themselves, and absorb culture. The UK Games Fund (UKGF) is proof that the government in the UK is realising this for a fact.
With opportunities like cloud gaming, subscription models, Blockchain, and others, businesses can make use of this sector to make significant revenue. Incorporating trends like AI, Blockchain, AR, VR, and many others, your business can amplify the profits and revenue generated.
You don’t have an in-house team to do all that? UK game development companies can help you with that.
A reputed company like Webskitters Ltd. can help you develop games that can make you stand out in the industry. With a team of experts who know how to develop games using the latest tools and technologies, you can make games that resonate well with the target audience.
So, what are you waiting for? Book a call with us today, and let’s discuss your path to success in the game development industry.
FAQs
What does the UK Game Development Fund mean?
It’s a government initiative supported by a $510M creative package to boost the gaming, advertising, films, and music industries.
Who are the parties to the UK Video Games Council?
The council consists of gaming industry representatives working closely with Whitehall to drive creative sector growth.
What are the objectives of the UK Games Fund (UKGF)?
UKGF supports startups with prototype funding, promotes IP standards, and encourages new game developers and designers.
How does the UKGF matter to UK businesses?
It reduces risks, builds investor confidence, creates jobs, and strengthens the overall gaming ecosystem.
What business opportunities exist in the gaming sector?
Models like free-to-play, ad-driven, subscriptions, premium games, Blockchain, and real-money gaming drive huge revenues.
What is the future of game development in the UK?
Technologies like AR/VR, AI, cloud gaming, Blockchain, and social experiences are set to reshape the industry.
How to choose the right game development services in the UK?
Look for experience, creativity, technical expertise, transparency, and flexibility when selecting a studio.
