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Stephen Timms MPComputer Games Competitiveness Analysis launch |
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I am delighted to be able to bid you a very warm welcome to the DTI Conference Centre this afternoon for the launch of "From Exuberant Youth to Sustainable Maturity", the competitiveness analysis of the UK computer games sector, commissioned by DTI from Spectrum Strategy Consultants. A little later on, Ben McOwen-Wilson from Spectrum will talk in detail about the report's findings, but I would like to open the proceedings with some reflection on:
Our commitment to the UK computer games industry Let me say at the outset how much in the DTI we value this industry. It is absolutely clear to us that the games industry is economically of great strategic importance to the UK, and so we need to be taking it very seriously. Economic Importance Spectrum has confirmed that the UK market for games is the world's third largest behind the US and Japan. The industry generates per annum some £1.1 billion of value to the UK in terms of retail, distribution and publishing margins, development advances and royalties. It employs more than 20,000 people including 6,000 in development – well above any of our European neighbours. And is a significant contributor to the UK's balance of trade delivering a positive £186m balance and so compares very favourably with other creative industries such as film and TV. Strategic Importance As for strategic importance – this industry embodies some of the most creative and technologically advanced work you can see anywhere in the UK, with the potential to impact way beyond the console in the living room or the PC in the teenager's bedroom. The creation of compelling digital content underpins so many of our current priorities like digital TV, mobile or broadband. And within that wider content community, the computer games sector is at the leading edge, potentially ideally poised to exploit the opportunities these new platform developments offer. The games industry has given us some examples of inspiring entrepreneurship, which we want to see emulated and celebrated. The Competitiveness Analysis It is well known – and rightly - that the UK games industry has been highly successful. But, the key question for this study is whether that past success is sustainable. Are there particular challenges? And if so, what should be do about them? What was needed was a better picture of where we stand. That's why we commissioned Spectrum earlier this year to carry out the full competitiveness analysis – the first of its kind for this industry. We needed to know the current state of the UK industry and where it is positioned relative to other countries. We needed to know the challenges affecting its competitiveness and also the opportunities there. And we needed some pragmatic, implementable actions to take forward to ensure that we can meet those challenges and exploit those opportunities. I am grateful and the Department is grateful to all those - individual games developers, games publishers and others – and particularly the trade associations TIGA [pronounced TIGER] and ELSPA, and Screen Digest - who played an important role in the completion of this study. It simply would not have been possible without the time and enthusiasm many of you here today gave so willingly. Ben is going to discuss the findings of the report in full in a moment but let me mention some of the key findings that struck me. The study confirmed that this industry has been punching above its weight. It is a significant global player. The development sector especially is very well regarded creatively and technically and very successful in terms of worldwide sales for its size. The industry certainly has the potential to grow within existing markets, and to exploit attractive new markets emerging through widening demographics and new platforms. But, Spectrum also found that the UK games industry has reached a crucial point in its evolution. Past success has been down to strength in creativity, sheer energy and enthusiasm, entrepreneurship and - maybe in some cases - some good luck. But to use the analogy of the report's title - our exuberant youth could now be facing a somewhat uncertain adulthood. It certainly seems to be getting tougher for many to make a profit in this industry. With the evolution of more powerful games consoles and a huge variety of digital content generally available from all over the place, customers' expectations are getting higher and higher – they want better sound, better production values, better story lines. This means, of course that the costs of development are going up the market is becoming more and more hits driven. So it's no place now for the faint-hearted!! As you will hear, Spectrum found that the industry is facing some very grown-up challenges. For example, in terms of its reputation, the way the games sector is presented, the way it is perceived by people in some key areas – such as the investment community, those in important overseas arena, those planning their future careers. Despite the efforts of ELSPA in particular, the games industry simply does not enjoy the reputation afforded to comparable industries. Then there are challenges in terms of the skills base. Inevitably perhaps, given the relatively short life of the industry, there is some catching up to do to ensure people have the right skills for the job, that they are up to speed on the right business tools and processes for tasks like marketing to potential buyers or investors or managing projects effectively. I was particularly struck by what Spectrum had to say about the challenge of improving industry-level infrastructure and communication. ELSPA and TIGA have already been playing a valuable role. But there is a real opportunity now to improve communication across those communities. Action plan So what needs to be done? Spectrum, with some excellent input from the industry itself has put together an Action Plan of things the industry, we in Government and others – such as skill set the Sector Skills Council for the games sector – things that all of us could do in the short term to help ensure that the UK industry is able to overcome these challenges and face the future on a more stable footing. Roger Bennett from ELSPA and Nigel Davies from TIGA will be speaking a little later on giving their reactions to the recommendations. For our part, we welcome these proposals and we are determined to play our part in taking them forward to help ensure that the productivity and competitiveness of the UK games industry are maximised. And I would like to announce two things we are already putting in place to make that happen. UK Games Pavilion at E3 Firstly, the report recommends that as a priority we should take steps to raise the profile of the UK games industry abroad, particularly at the world's main trade show for games, E3, in Los Angeles. I am pleased to announce formally this afternoon that starting at next May's event and for the following 2 years after that DTI will be putting significant funds into a new, 2500 square foot, high-profile and highly-visible UK Games Pavilion at E3. At a relatively low cost to participating companies, the Pavilion will offer the practical facilities - like meeting rooms and networking space - and other assistance that you have been telling us you need. We will be delivering the Pavilion in partnership with the Creative Industries Unit of the British Council. The Pavilion will, I understand, be well positioned next to the Sony stand in E3 West Hall, one of the major halls at the E3 venue. The Pavilion will offer:
I hope than many of you will take space on the Pavilion and that many more in the industry will be able to take part in the some of the events for the UK industry that we are planning to take place at E3 next year. I am hoping I shall be able to attend myself. ITS Mission to Canada, the US and France The Action Plan recommends that as well as sharing UK best practice we should seek out examples of best practice from overseas. In response, the Department's International Technology Service is working with the University of Abertay on a fact finding mission "Competing in the Global Game" which is planned for early next year. The mission will be lead by Dr Jim Terkuerst of University of Abertay and will take a group of practitioners in the UK games industry including I see some well known names among you - Jason Kingsley from Rebellion, Tim Rance from Lionhead and Carl Jones from Wide Games, Ben Wibberly from Babel. They will visit key publishers, developers and technology companies in Canada, the US and France. The Mission will offer an excellent opportunity to identify critical success factors and elements of best practice and bring them back for full dissemination and, we hope, implementation in the UK industry. Pan-Industry Forum In a way underpinning many of its recommendations, the Action Plan also proposes a Pan-Industry Forum to include players from across the value chain, to promote debate, and to build understanding and confidence amongst the games industry communities. We stand ready to help facilitate this Forum and look forward with interest to hearing the reactions of TIGA, ELSPA and other interested parties to it. So I believe the report makes a valuable contribution to the mapping and analysis of the games sector. It gives us a basis on which to move forward, and to work strategically with the industry - with TIGA and ELSPA, with Skillset, the British Council and others - all working towards improving the productivity and competitiveness of this key sector. Now I am sure you are anxious to hear from Ben the full details of Spectrum's findings and recommendations so let me end by underlining again how much I and my colleagues in the department are looking forward to working with everyone in this industry to build successfully on your stunning achievements to date. We need a lot more success ahead and I'm certain we can achieve it. Let's work together to make sure that we do. Thank you. |
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Other speeches by Stephen Timms MP
(the following are available from the archive) |
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