GIC report investigates overseas acquisition of UK games studios
Working with Oxford Economics, a GIC report providing new data on studio acquisitions by global games companies has been published by its funders, the BFI and Creative Industries Policy and Evidence Centre (Creative PEC).
Overseas companies acquired 118 UK games studios between 1993 and 2022. Most acquisitions were by USA, Chinese and European games publishers, several of those with valuations of over £1 billion. We find that deal volume and value accelerated between 2018 and 2020.
With 52% of the games development workforce in the UK now employed by global companies (source GIC/TIGA) and the Competition and Markets Authority approving Microsoft’s acquisition of Activision Blizzard, the issue of overseas acquisitions and their impact on the games development sector is in the spotlight.
The report was commissioned in 2022 to uncover the feasibility of providing economic evidence about any market impacts of these acquisitions. While the research was not scoped to draw any conclusions, we review whether potential market impacts including improved access to capital, marketing and distribution, loss of creative autonomy and overseas transfer of profits are quantifiable in future.
We conclude that a definitive database allowing analysis of these potential impacts does not yet exist but could be created from a mix of data sources, including our unique longitudinal database of games companies actively curated since 2007.
Oxford Economics also review whether potential market failures can be quantitively assessed in future. Potential market failures include reduced innovation, overseas relocation of production and IP, reduced profitability, loss of tax revenues due to transfer of profits overseas and an “upstream” market failure in access to finance in the UK triggering early sales under disadvantageous terms.
Sound easy?
No?
It’s not easy but it’s doable with the right advice.
We’re here to help.
You can access some of our products like our Pre-investment checklist (10 reasons to raise money for the first time and when to act on them), 5 ways to plug skills gaps in your top team’s experience, our forthcoming Games Investor Profiles, our Games Investment Deck template (with explanations and advice for creating a strong pitch deck), the Art of the Pitch (10 pitch recommendations to read BEFORE you do your first investor pitch)
You can also book an Investment Deck Review, conduct a Practice Pitch Session with us before you face the investors as well as a range of one to one advice from a team that has reviewed hundreds of games investment pitches.
