UK Video Games Industry 2025: Portsmouth Research Reveals £12 Billion Annual Economic Impact in TIGA Report
Introduction to the 2025 TIGA Report on UK Video Games Industry
A detailed report commissioned by TIGA has been released with research conducted by academics from the University of Portsmouth. This document provides an in-depth analysis of the economic contributions made by the UK video games industry during the current year. The study was authored by Professor Homagni Choudhury, Professor Joe Cox, and Dr Alan Leonard from the School of Accounting, Economics and Finance at the University of Portsmouth. It spans one hundred pages and includes sections on international comparisons, overall economic effects, and evaluations of specific policy suggestions put forward by TIGA. The report aims to highlight the sector’s role in supporting high-skilled employment and driving regional development across various parts of the United Kingdom. Data collected for this research draws from industry sources and economic modeling to present a comprehensive view of the video games market in the UK.
Key Economic Contributions of the UK Video Games Sector
The UK video games industry produces twelve billion pounds in gross value added each year based on the findings in the report. This figure represents the direct and indirect economic output generated through development, distribution, and related activities within the sector. In addition to this, the industry sustains more than seventy-three thousand jobs throughout the country, including roles in game design, programming, and marketing. Around twenty-eight thousand of these positions are held by developers who work in specialized, high-skilled areas that require technical expertise. The sector also delivers two point two billion pounds in tax revenues to the government treasury annually, which supports public services and infrastructure projects. These contributions demonstrate how the video games industry functions as a significant driver of economic activity in the United Kingdom. Smaller studios, which make up a large portion of the market, face challenges in securing funding due to limited assets and unpredictable project outcomes.
Regional Economic Impact Across the United Kingdom
The report breaks down the economic effects of the UK video games industry by different regions to show varied contributions. For example, the North-West region benefits from four hundred forty-three million pounds in gross value added from gaming activities each year. Scotland receives three hundred ninety-three million pounds through similar industry operations, while the West Midlands sees three hundred sixty-two million pounds added to its economy annually. These regional figures illustrate how the video games sector spreads its influence beyond major urban centers like London and supports growth in diverse areas. Employment opportunities in these regions include roles that promote innovation and export-focused businesses within the gaming field. The distribution of economic benefits helps balance development across the United Kingdom and reduces reliance on traditional industries in certain locales. Seventy-eight percent of UK studios employ four or fewer staff members, which emphasizes the prevalence of small enterprises in driving local economies.
International Comparisons of Video Games Tax Incentives
The UK’s Video Games Expenditure Credit offers an effective relief rate of twenty point four percent according to the report’s analysis. This rate falls short when compared to incentives provided in other countries such as France and Australia, where the relief stands at thirty percent. Quebec in Canada provides an even higher rate of thirty-one point nine percent for similar tax credits in the gaming sector. These comparisons reveal that the UK video games industry operates at a competitive disadvantage in attracting international investment and talent. The report suggests that without adjustments to these policies, the United Kingdom risks losing ground to jurisdictions with more generous fiscal support systems. Enhancing the tax framework could position the UK as a more appealing hub for game development on a global scale.
Proposed Policy Reforms for UK Video Games Industry Growth
Several policy options have been modeled in the TIGA report to strengthen support for the UK video games sector. One proposal involves increasing the headline rate of the Video Games Expenditure Credit from thirty-four percent to thirty-nine percent. This change could lead to the creation of six thousand two hundred ninety-one new jobs and an additional four hundred thirty-six point two million pounds in gross value added. Another suggestion is to raise the qualifying expenditure threshold from eighty percent to one hundred percent, which might generate ten thousand five hundred fifty-one jobs and boost gross value added by seven hundred thirty-one point seven million pounds. The introduction of an Independent Games Tax Credit at fifty-three percent for games with budgets up to twenty-three point five million pounds is also recommended. This measure could create six thousand nine hundred fifty-two jobs and increase gross value added by four hundred eighty-two million pounds. The Independent Games Tax Credit would yield a return of one point one six pounds in tax revenue for every pound disbursed to developers.
Analysis: Potential Benefits and Challenges in Enhancing Tax Credits
The proposed enhancements to tax credits in the UK video games industry could significantly amplify its economic contributions based on the report’s modeling. By reducing the cost of game development, these measures would encourage greater investment and foster the establishment of more high-skilled positions across regions. The analysis indicates that strategic fiscal support would not only create jobs but also stimulate wider economic activity through increased exports and innovation. However, challenges remain for small and medium enterprises that struggle with access to finance due to the unpredictable nature of commercial success in gaming projects. Addressing these issues through targeted credits could help level the playing field against international competitors. The report’s rigorous economic evaluation provides evidence that such investments would deliver substantial returns to the treasury while promoting long-term growth in the sector. This approach aligns with government priorities for job creation and economic expansion in creative industries.
Statistical Overview: Key Metrics from the 2025 TIGA Report
The table below summarizes essential data from the TIGA report on the UK video games industry’s economic performance and policy projections.
| Metric | Value | Description |
| Annual Gross Value Added | £12 billion | Total economic output generated by the UK video games sector each year. |
| Supported Jobs | 73,000+ | Number of positions sustained across the industry, including indirect roles. |
| Tax Revenue Contribution | £2.2 billion | Annual taxes paid to the UK treasury from gaming activities. |
| Developer Employment | 28,000 | High-skilled jobs specifically in game development roles. |
| Raise VGEC to 39% | 6,291 jobs, £436.2 million GVA | Projected outcomes from increasing the tax credit headline rate. |
| Increase Qualifying Expenditure to 100% | 10,551 jobs, £731.7 million GVA | Expected results from expanding expenditure eligibility. |
| Independent Games Tax Credit at 53% | 6,952 jobs, £482 million GVA | Anticipated benefits from new credit for smaller budget games. |
| IGTC Return on Investment | £1.16 per £1 | Tax revenue generated for every pound spent on the credit. |
This table offers a clear snapshot of the current state and potential future impacts within the UK video games market.
Global Context: Video Games Market Projections for 2025
To place the UK figures in perspective, the following table compares global video games market projections with the UK’s contributions.
| Region/Market | Projected Revenue 2025 | Annual Growth Rate | Key Notes |
| United Kingdom | £12 billion GVA | Not specified | Focuses on economic value added, supporting 73,000 jobs. |
| Global Market (Newzoo) | $188.8 billion | +3.4% YoY | Growth shifts to emerging markets and mobile segments. |
| Global Market (Statista) | $522.46 billion | +7.01% CAGR 2025-2030 | Includes broader media and entertainment elements. |
| Global Market (Udonis) | Approaching $200 billion | Not specified | Emphasizes monetization strategies and player habits. |
| Global Market (MIDiA) | $236.9 billion | +4.6% YoY | Covers software, hardware, and subscriptions. |
These comparisons highlight the UK’s position within a rapidly expanding worldwide video games industry.
Expert Insights from Academics and Industry Leaders
Professor Homagni Choudhury stated that the video games sector already contributes significantly to growth and jobs in the UK economy. He noted that with enhanced support through tax credits, the industry could play a larger role in the nation’s long-term strategy. Dr Alan Leonard emphasized that the economic analysis shows strategic investments would create thousands of jobs and generate returns for the treasury. Professor Joe Cox pointed out that the UK risks losing its competitive edge without policy reforms in fiscal support. Dr Richard Wilson OBE, CEO of TIGA, described the sector as a success story that needs better tax incentives to compete globally and help small studios grow.
Future Implications for the UK Video Games Industry Development
The findings from the 2025 TIGA report suggest that implementing the proposed tax reforms could transform the UK video games industry landscape.
By focusing on enhanced credits, the sector might attract more inward investment and foster innovation among developers. This could lead to increased exports and a stronger presence in the global market for UK-based games. Policymakers should consider these recommendations to maintain the industry’s competitiveness against international rivals. Continued research and collaboration between academia and trade associations like TIGA will likely provide further insights into optimizing economic contributions. Overall, the report establishes a foundation for sustained growth in high-skilled employment and regional development within the United Kingdom’s gaming sector.
