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The three things I want to ensure a healthy UK games industry

By on May 17, 2012
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This is a lightly edited transcript of a talk I gave at the Westminster eForum on the future of games last month.

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Thank you and obviously well done to TIGA and UKIE for the tax breaks.

I’m here to talk about business models, I want to talk about three things: I want to talk about change, I want to talk about adaptability, and I want to talk about resistance.

Change

I think we all know that the games industry, like all media industries, is changing at an unprecedented rate. The emergence of digital distribution is causing massive damage across the industry as studios fail, retailers go into administration, and publishers fail to adapt.

I think this is great news for the games industry, great news for innovation and great news for our long‐term future.

The games industry is not like the music industry or the film industry. We’re a young industry. I recently turned 40, which makes me exactly as old as the games industry. In 1972, the year that I was born, Pong was created. It first appeared in a bar in the US with five simple instructions: “avoid missing ball for highscore” (they thought high score should be one word). It changed the nature of entertainment. Two of my fellow speakers at the eForum, Ian Livingstone and David Braben, are even older than the industry. They were important figures in my childhood as entrepreneurs and creators, simultaneously, and they both continue to be vital to the industry today.

That’s the bit that matters. Our industry is so young that the people running the top of the industry were entrepreneurs. They don’t do things because that’s the way that their fathers did it, or their father’s fathers did it; they had to learn and experiment in the early days of the industry.

Adaptability

As an industry we’re not afraid of new technology. There’s nobody in the games industry who doesn’t, in some form, love technology. Otherwise, we would be doing book publishing or music making.

We embrace technology. We are not afraid of new platforms. We create them in the case of consoles, or we become the dominant entertainment form on them, like on Facebook, the iPhone, browsers.

We experiment with new business models. Companies like Playfish out of the UK, bought by EA, on Facebook, companies like Mind Candy which makes Moshi Monsters, Jagex which makes Runescape, each has found new ways to reach new customers using new technologies, while the other creative industries have been too scared to tread there.

We love change – or, at least, most of us do, but some people still remain in denial. They think people will always want shiny discs. They hope they will retire before this transition really hits them so they don’t have to deal with it. They hope the industry will remain a pay-up-front boxed product industry for ever, because it’s easier for them, not because it’s better for creativity and not because it’s better for the consumer.

I think the recent administration of Game highlights just quite how unlikely those people are to be right, but they remain in denial.Today, at the Westminster eForum, I urge policy makers and game makers not to listen to the deniers. I want them, and I want you, to embrace a world where the assumption is that content will be freely available, but you can still make enough money, more than enough money to pay for that content. You will pay for it through new business models, through using the power of the internet to find the fans who love what you do, and enable them to spend tens, hundreds, even thousands of dollars for stuff which they truly value.

We are already seeing that working on the iPhone. Last year nine games made more than $20 million on the App Store. It’s still small numbers. We are not there yet, we are at the early days. Of those nine games, seven of them were free.

Resistance

How would I like people to do that? There are three things I want to highlight.

I would like you to think about crowd funding, which I think may be one of the easiest ways of bridging the early stage financing gap. I would like to look at how we can allow consumers to vote with their wallets for products they want created in advance and – this would be a big change – enable them to benefit from the upside if they create a wildfire hit.

I want tax breaks to be targeted to support innovation, creativity and entrepreneurship, not to put money into the pockets of overseas shareholders.

And I would like the copyright regime to continue to be revisited. We need to embrace the change that has already happened, driven by the internet and other technological and social changes that are already here, rather than deny them and pretend that they haven’t happened.

I don’t think there’s ever been a better time to be a game maker in the UK, but please don’t let the big entrenched dinosaurs ruin it for the rest of us.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com