Industry trade body Tiga has called for the creation of a Creative Content Fund to provide a new source of financing for UK game studios.
The organisation has suggested a £3m fund per annum for game developers, split in to loans of up to £150,000. Part of this could be funded by National Lottery funds, which Tiga has also called for finance from.
The trade body said in comparison, the British Film Institute invests over £26m of Lottery funds a year to support film development, production and distribution, a figure set to rise to £30m by 2017.
A similar scheme is also run in Finland through the government-backed Tekes program, which has provided nearly $70m in funding since the late 1990s to studios in the country, including Rovio and Supercell.
Tiga suggests financing for the UK’s own initiative could be provided on a match-funding basis or through a convertible loan deal, with the CCF aiming to recoup money from recipients.
Recommended criteria for the fund include:
· The company is based in the UK.
· The company proposes to develop original new games IP which is innovative in terms of content, gameplay and, where appropriate, business models.
· The company retains majority ownership of the IP during the term of the loan.
· The company should have to demonstrate a robust business plan about how it intends to use the match-funding to enhance its prospects for commercial success.
· The CCF should invest in projects that have the potential for commercial success. Independent assessments of each game’s production and commercial potential should be sought as part of the CCF’s due diligence, before a funding decision is made.
· A commercial mentoring business advisory service should be provided for companies benefiting from CCF disbursements in order to provide guidance to new companies.
According to a recent survey by Tiga, 43 per cent of game businesses in the UK noted funding as the biggest challenge they face. It claimed that often studios secured finance by negotiating deals to trade away their IP rights.
"Establishing a Creative Content Fund would improve developers’ ability to raise finance, stimulate original IP generation and promote studio growth,” said Tiga CEO Richard Wilson.
“It would enhance the independence and commercial viability of game developers and strengthen the prospects for the expansion of the UK video games industry.”