UK Games Development Sector Faces 'Most Severe Downturn on Record', TIGA Reports

The UK's video game development industry is currently undergoing its most significant decline ever, marked by a 4.5% year-on-year drop in employment.

Data from the TIGA "Making Games in the UK" report indicates that between May 2024 and September 2025, 491 companies shed 3,655 full-time positions. Over the same period, 513 expanding studios created 2,751 new roles, leading to a net reduction in the overall workforce.

Consequently, the total workforce shrank from 28,516 to 27,347 within this timeframe. Interestingly, the number of freelance contractors saw an increase, reaching over 4,245.

The UK currently hosts 2,110 game studios, a decrease from its peak of 2,175 in 2023.

During the research period, 206 companies either closed down or exited the games industry, accounting for 10.2% of all entities (both active and dissolved).

Larger studios, those employing more than 15 staff, bore the brunt of these changes, experiencing nearly 1,800 redundancies. In contrast, micro and small studios demonstrated resilience and growth, with companies employing one to four staff increasing by 3.2% and those with five to 15 employees growing by 9.2%.

Job losses were also observed across platforms, with console-focused studios seeing a 2.1% reduction, significantly less severe than the declines in mobile (12.9%) and PC (13.2%) development.

The creation of new studios faced ongoing challenges, plummeting by over 30% for the third year in a row. The number of start-ups decreased from 281 to 137 during the research period, reaching a 15-year low.

TIGA attributes this widespread decline in employment, layoffs, and sluggish studio growth to a combination of 'weak global sales, insufficient early-stage financing, and ongoing post-pandemic restructuring.'

In response, the trade association has implored the government to enhance the Video Games Expenditure Credit (VGEC). Their proposal includes implementing a 53% credit rate on 80% of costs for projects valued under £23.5 million, with the goal of significantly boosting the sector's Gross Value Added (GVA).

Such a measure, TIGA projects, could elevate the GVA by £482 million and generate nearly 7,000 jobs, including 896 direct development positions.

Additionally, TIGA recommends strengthening the UK Games Talent and Finance CIC to better 'enable more studios to start-up, scale-up, and grow.'

Richard Wilson, CEO of TIGA, emphasized the industry's strengths, stating, "The UK video games industry stands as the largest in Europe, boasting world-class talent, studios, and universities. Previous research by TIGA, in collaboration with the University of Portsmouth, demonstrates that the sector contributes £12 billion to the GVA."

He cautioned, however, that "After 14 years of continuous growth, we are now witnessing a decline of unparalleled magnitude and pace. Without decisive policy intervention, the UK faces the substantial risk of losing thousands of highly skilled jobs and falling behind international competitors who receive stronger support."

Wilson concluded by asserting that "Strengthening the VGEC has the potential to create thousands of development jobs, bolster studios' financial stability, facilitate the creation of new intellectual property, and ultimately guide the sector back towards a trajectory of growth."