The creative industries in the UK are sometimes overlooked by investors, however many parts of the sector are thriving and provide a rich source of potential investment opportunities. This is what is explored as part of the Invest in Creative toolkit; developed as the investment cornerstone of the Department for Digital, Culture, Media and Sport’s Creative Scale-Up Programme by UK Business Angels Association and ScaleUp Institute, in partnership with Greater Manchester Combined Authority, The Growth Company, West of England Combined Authority and West Midlands Combined Authority. The toolkit consists of modules focusing in on games, media tech, music and fashion, with 25 in-depth interviews from industry experts, along with bespoke guides for tax and legal considerations, infographics and one-of-a-kind sector-focused animations.
The games industry has grown consistently over the past two decades, with it reaching a record £7bn in 2020, an increase of +29.9% from 2019. This growth has only accelerated since the start of the pandemic – as people have sought temporary respite from reality, many have turned to digital environments to unwind and connect with friends. The diversity within the sector is also ever-growing, whether in terms of the new technology being released, the geographies that games are extending into (particularly the mobile games market), or even the new demographics it’s attracting (the highest growing player market is people 30+), which all make for better investment opportunities.
See below for some of the ways you can familiarise yourself with the sector and how to spot exciting young games businesses. Find out much more on this topic via the games module in the Invest in Creative toolkit.
- Familiarise yourself with the ecosystem and the of part it that is right for you. The games ecosystem incorporates everything from content, publishing, technology companies, middleware and tools, to investors, platform manufacturers, hardware, software and IP. Some investors operating within the sector prefer investing in games studios or businesses, as opposed to projects. Additionally, as with so many industries, investors are interested in people, specifically seeking out teams with a key entrepreneurial lead. Ian Livingstone, Co-founding Partner, Hiro Capital, says on this when assessing a possible opportunity: ‘“I have a quite a long due diligence checklist when wearing my angel hat. This is a people business and the first thing for me is to assess the senior leadership team. My ideal is where an amazing creative person is in an equal partnership with an amazing businessperson. Both have equal standing in the company.”
“My ideal is where an amazing creative person is in an equal partnership with an amazing businessperson”
- Get to know the industry and form relationships with key figures operating within it – there are a range of leading UK games businesses, including but not limited to Codemasters, Team17, Mediatonic, Curve Digital and so many more. Familiarise yourself with these companies and their senior leadership. Get to know existing founders of great games companies to find out about opportunities, as they’re the ones that are plugged in.
- Engage with the sector’s leading trade bodies and others supporting early-stage growth, including UKIE, TIGA or the UK Games Talent and Finance CIC (incorporating the UK Games Fund). Many young studios flock to the Games Fund. Keep up-to-date with the websites and wider communications of any of these organisations for an indication of the next big studio or game.
- Think of the games sector as you would any other sector – it’s increasingly becoming relevant to other sectors, which is important to take into account. Beyond games designed for recreation, games also offer potential for advances in education and training simulation, TV and film, even car manufacturing. There’s still a way to go to highlight and celebrate the games sector in the UK.
The games industry has proved to be a resilient sector throughout the pandemic and that looks set to continue. Find out more about this explosive sector via the games module in the Invest in Creative toolkit.
Sign up for the first of the events associated with the Invest in Creative games module: our Friday Focus with Jo Twist, CEO of UKIE on 16th July, see here for more information.