THE BLOG
05/11/2018 09:26 GMT | Updated 06/11/2018 10:19 GMT

No Lives Left: Why A No-Deal Brexit Could Demolish The UK Video Game Industry

Video games generate £5bn for the economy and 50,000 jobs - but a no-deal Brexit threatens to destroy all that for no gain

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The UK video game industry is a resounding modern success story for the country.

It contributes impressively  to the economy, generating a gross value add of £2.87bn in 2016, according to the BFI. It is a driver of employment, helping nearly 50,000 people into jobs up and down the land.

Development studios based in the UK are responsible in whole – or in part – for the creation of major international hits such as Football Manager 2019, Forza Horizon 4 and the recently released cowboy epic Red Dead Redemption 2.

But this dynamic and rapidly growing industry, like many others in the UK, is under threat from Brexit and in particular, a reckless descent into the sphere of reckless madness we commonly phrase as a ‘no-deal’.

Earlier this week, Games4EU released a 51 page report exploring the potential impact that a no-deal Brexit would have on the sector. Built on expert legal advice from specialist video game lawyer Jas Purewal, the insights of our policy team and research conducted by other organisations (including government), our conclusions were bleak.

A no-deal Brexit would be devastating for the UK video game industry and its consumers. It would increase the cost of doing business due to barriers at the border, unnecessary red tape and through project delays caused by hiring challenges.

It would undermine essential individual rights that helps the domestic industry to function, both by depriving the EU nationals who account for a third of the workforce, and by removing rights of consumers to returns and refunds.

Finally, it would ultimately compel UK-based video game businesses to relocate in part – or in whole – to countries in the European Union to remain on the right side of data adequacy and VAT laws.

In short, the clammy, pestilent hand of a no-deal Brexit threatens to snuff out – or at least severely cripple – a sector which has flown the flag effectively (and effortlessly) for a global Britain for years.

So, why does this matter? In a set of circumstances where food and medicine may be stockpiled, flights grounded and borders erected, why care about the impact of a no-deal Brexit on the video game industry?

For one thing, the impact of a no-deal Brexit on the video game industry is one that will be felt across the country.

Unlike many industries, the UK video game industry is a truly national one with over 20 cities playing host to more than 20 video game companies. If jobs are lost, it will be local communities that feel the loss of this global sector the most.

Next, a no-deal Brexit wouldn’t just damage the business of video games; it’d also strike a major blow to our consumer economy.

The UK is the fifth biggest consumer market for video games in the world, generating £5.11billion in revenues in 2017 according to trade body Ukie. Damaging the domestic industry and hitting consumers in the pocket through a hard Brexit will have a knock-on effect on our already hard-done high street

On top of that, smashing the UK video game industry with a no-deal Brexit would be one more kick in the teeth to young people.

According to Creative Skillset, 68% of employees in the video game industry are under the age of 35 and earn an average of £34,200. Crippling the sector will deprive young people of the kinds of jobs that’ll help them prosper on in life.

But arguably more than that, allowing a no-deal Brexit to ravage the video game industry would send a depressingly backward message about our country to the rest of the world.

The video game industry is, by its nature, pioneering. Its’ relentless focus to find new ways to develop entertaining, visually arresting and culturally significant video games drives innovation.

The sector constantly pushes forward in fields as varied as development, AI, economy design and data analysis. It is also, almost always, the first industry to new technology – creating the frameworks within which others can work in fields such as virtual and augmented reality.

Today, the UK within the EU is well-placed to continue to lead in this sector globally. But a no-deal Brexit threatens to take the work of studios, service providers, trade organisations, and even the Government itself, and destroy it for no gain at all.

So, what’s the solution to this problem? The answer is that the Government must – at all costs – avoid a no-deal Brexit. It must also, however, avoid a hard Brexit too. Any deal that ejects the video games industry from the single market, customs union and doesn’t secure an adequate arrangement on data will still be significantly damaging to the sector, even if it avoids the devastation of a no-deal.

Instead, the best course of action for parliament is to either pursue the softest Brexit possible or to ask the country whether it is the best course of action with this new information available to them.

The Brexit debate has, for years now, been far too focused on what has happened in the past. It is essential that politicians start looking to the future once again and make sure they do what they can to protect a vibrant, growing industry of the future before it is too late.   

George Osborn is co-founder of Games4EU and a former games journalist