How Brexit impacts U.K.’s $3.83 billion gaming industry

“My best guess is that there will be little or no impact on the games industry,” said Pachter. “Games will still be sold, and those games produced by EU domiciled companies like Ubisoft will probably still make their way to the U.K. market — although they may be subject to a different tariff than the zero tariff currently imposed.”

Newzoo’s Warman said something similar.

“Overall, I think the impact will be not as big on the games business as it will be on other industries,” said Warman. “But the upcoming break-up of Great Britain is huge.”

And at least one indie developer thinks he’ll still do alright making games in the United Kingdom. Positech Games founder Cliff Harris, who is responsible for strategy sims like Democracy 3, said he’s not worried.

“Firstly, a low pound against the dollar means I actually need to sell fewer games to survive than before, as all games are effectively priced in dollars, which is obviously, financially a great thing,” Harris told GamesBeat. “The only problem would be any issue that prevented me working easily with contractors in Europe. But frankly, I only use remote workers and they are from all over the world, so I can’t see it vaguely being a problem.”

Above: Democracy 3 from Positech.

Image Credit: Positech

Harris says that if you employ a ton of visa workers, this could end up causing you some trouble. But that’s not how his business works.

“If someone is in the same position as me, where all their staff are U.K. citizens, and who make a profit, then Brexit means you are possibly better off,” he said. “I think overall, it’s really not that bad for U.K. devs at all. I sell games to every country on Earth as it is. Language barriers are far more real than trade barriers to people selling products online. As usual, nobody will agree with me, but there you go.”

Nomad’s Whiteford, who voted to remain in the EU, reckons that leaving could even have benefits for him. He points to a memo from game-industry lobbying group TIGA that claims Brexit could actually mean more tax breaks for developers.

“Free of EU law, tax breaks could perhaps be improved to further stimulate business,” said Whiteford. “We are currently looking at another round of investment and both U.S. and Asian investors are on the cards. The talent is here — at least for now — and with a weaker pound, value is high. We sell digitally around the globe. Again a weaker pound works for us in this scenario. On the world stage, nothing changes. We’ll have to see if changing regulations give us more work to do in the future concerning Europe, but it’s too early to say.”

No, seriously, what does Brexit mean?

Finally, we asked VB Insight director (and U.K. resident) Stewart Rogers to just tell us what all of this means. Like everyone else, he sees uncertainty as a problem. He points out that U.K. will now have to pay the EU to trade with it, and he’s worried about what trade with the U.S. will look like after this. But, overall, he thinks not much is going to change.

“Yes, revenues will be hit if the pound weakens further, but the Bank of England has been planning for this moment for months and states that it has contingency plans to assist with supporting the market and establishing stability.”

Rogers says that the biggest immediate issue is potential restrictions on movement that is key to the EU. Right now, the EU rules still apply, and people from U.K. can work in any country in the Union. If they feel like they can get out now and establish a job, they may flee the U.K. while they still can.

Above: Talisman from Nomad Games.

Image Credit: Nomad Games

“There are 21,000 jobs across the EU working on mobile games, for example, and the UK has the largest share, with 5,000 full-time employees,” said Rogers. “Looking at the research polls that indicate the age and education levels of those that voted to remain in the EU, and how those exact people — who are 18-to-24 with a high education level — fit the games industry mold, it wouldn’t surprise me if we see a ‘brain drain’ while the U.K. negotiates with the EU, taking advantage of the ability to work in the EU under the current rules and laws before any changes are imposed.”

And losing talent is something that could scare away investment … which could encourage even more U.K. developers to leave the country now. It’s a downward spiral waiting to happen.

“Whichever way you cut it, it costs a lot of money to hire and bring up-to-speed new employees, and younger employees are more likely to want to see the world before they age,” said Rogers. “The fear of a restriction on the ability to work across the EU in future — if that happens — may cause a migration of talent now and, therefore, an immediate burden on the industry.”