UK video games sector could unlock £500m boost with government backing

The UK video games industry reached £7.6 billion in consumer spending during 2024, continuing a decade-long trajectory of growth that has seen the market more than double since 2013. However, new data from industry body Ukie suggests that with targeted government support, the sector could deliver an additional £500 million in gross value added (GVA) over the next five years and create 6,000 new jobs.

The findings come from Ukie’s 2025 Consumer Market Valuation and accompanying policy briefing, which calls on policymakers to reform the Video Games Expenditure Credit (VGEC), expand access to finance, and bolster skills development.

“The UK games industry is a global success story—but without strategic support, we risk falling behind international competitors offering better incentives,” said Nick Poole OBE, CEO of Ukie. “Now is the time to press start on growth.”

Despite the overall market resilience, hardware sales fell by 5.1% year-on-year, with console sales plummeting 24%. The Nintendo Switch, now in its eighth year, saw declining demand as consumers await its successor. In contrast, the PlayStation 5 Digital Edition enjoyed a record year, buoyed by its competitive price and growing uptake of PlayStation Plus.

PC hardware and VR saw modest gains, up 6% and 7% respectively, while console accessories stood out with a 14% year-over-year surge.

Game software remained relatively stable, growing by just 0.6%. Physical boxed game sales plunged by 34%, now accounting for only 4% of total software revenue. Digital formats fared better—console digital purchases grew 3.5%, even as full-game sales dipped due to fewer blockbuster titles.

Mobile games were the standout performer, rising 8.1% to £1.7bn, although still trailing the Western European average growth of 13%. PS5 adoption and strong DLC performance helped offset pricing pressures from lower-cost hits like Palworld and Helldivers II.

Game culture spending dropped 13% across merchandise, media, and events. Events and venues saw an 11% drop, while live-streaming and video content fell 3% as audiences stabilised post-pandemic. Still, UK-based esports grew 44%, and grassroots events showed encouraging signs of revival.

Meanwhile, the number of incorporated UK games companies reached a record high in 2023, driven by regional expansion and a robust development ecosystem.

Ukie argues that these trends show both the resilience of the industry and the opportunity at hand. A strengthened VGEC and broader innovation support could yield a five-to-one return on public investment, based on analysis by Nordicity.

“We have the talent, the studios, and the stories,” said Poole. “Now we need bold policy to match our ambition.”