UK Games Industry Faces Historic Downturn, Calls for Government Intervention Grow
The UK games development sector is experiencing its most severe downturn on record, with employment falling at an unprecedented rate and start-up activity plummeting to a 15-year low. Industry body TIGA is urging the UK government to enhance the Video Games Expenditure Credit (VGEC) to prevent lasting damage to one of the nation’s most successful creative industries.
Record Employment Decline
According to TIGA’s latest Making Games in the UK report, the sector lost 1,537 development jobs in the year leading up to September 2025 – a 4.5% decline. This marks the fastest rate of job losses ever recorded and the first decrease in employment since 2011. The total UK games development workforce decreased from 28,516 to 27,347 between May 2024 and September 2025, despite an increase in freelance roles, with over 4,245 contractors now working in the sector.
Company Closures and Studio Growth
The report reveals that 206 companies either closed down or exited the games industry during the research period, representing 10.2% of all companies. While larger studios, those with more than 15 staff, were most affected – accounting for almost 1,800 redundancies – micro and minor studios continued to grow. Companies with one to four employees saw a 3.2% increase, while those with five to 15 employees grew by 9.2%.
Impact Across Game Genres
The decline in employment wasn’t uniform across all game genres. Console-focused studios experienced a 2.1% decrease, which was less severe than the drops seen in mobile (12.9%) and PC (13.2%) game development.
Start-Up Activity at a 15-Year Low
The formation of latest studios has significantly slowed, falling by over 30% for the third consecutive year. The number of start-ups dropped from 281 to 137, the lowest level in 15 years. Currently, there are 2,110 game studios in the UK, down from a peak of 2,175 in 2023.
Calls for Government Support
TIGA attributes the downturn to “weak global sales, poor early-stage financing, and post-pandemic restructuring.” The organization is advocating for an increase in the Video Games Expenditure Credit (VGEC), proposing a 53% rate on 80% of costs for projects under £23.5 million. TIGA estimates this could boost the sector’s Gross Value Added (GVA) by £482 million and create nearly 7,000 jobs, including 896 development roles. They too suggest bolstering the UK Games Talent and Finance CIC to support studio start-ups and growth.
Industry Leader Warns of Long-Term Consequences
“The UK video games industry is the largest in Europe, has world-class talent, studios and universities, and previous TIGA research with the University of Portsmouth shows that the sector generates £12 billion in GVA,” said TIGA CEO Dr. Richard Wilson. “Although, after 14 years of uninterrupted growth, we are now seeing a decline of unprecedented scale and speed. Without decisive policy intervention, the UK risks losing thousands of highly skilled jobs and ceding ground to better-supported international competitors.”
Wilson concluded: “Enhancing the VGEC could create thousands of development jobs, improve studios’ financial strengths, enable the development of new IP and place the sector back on the path of growth.”
Keep reading