How will Brexit affect the UK Video Games Industry?


It’s official. The UK has voted to leave the EU which has left a sour taste in my mouth as well as approx. 48% of the UK’s population. Ignoring my obvious political views let’s have a look to see how this history changing verdict will shape the future of the video games industry.

The Brexit Campaign

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52% of votes for the EU referendum favoured leaving the EU. A shocking result considering many people were confident the result would swing the other way just hours before the national announcement. The impact of this news was instantaneous. The value of the pound plummeted, dropping to its lowest level against the dollar since 1985.
This doesn’t necessarily mean it is all doom and gloom for the video games industry as UKIE have shown some optimism by stating they will work towards making the UK the best place in the world to make and sell games, despite the Brexit result. Unfortunately, the reassurances from this Trade Body are insufficient to nullify the uncertainty surrounding how this will impact the video games industry. So what should we expect to see over the next few years.

Increasing Prices

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Gaming hardware prices are a very sensitive subject with many gamers but we may well have to re-evaluate what we consider to be ‘value for money’ as the Brexit result may have a negative impact hardware prices. Video game prices are very closely linked with the value of the pound and the exchange rate, since many games sold in the UK are manufactured in the EU. Therefore, a drop in the value of the pound may result in price increases for gaming hardware.

If you thought that the news that Mircosoft and Playstation will release Project Scorpio and PS4 Neo was good news then your wallet will disagree. The EU referendum result will likely lead to prices for these consoles to be higher than first anticipated. We have seen an example in the past whereby the price of console hardware increased due to a weak pound so be prepared for a recurrence of events if the value of the pound remains consistently low.

Thankfully, there is a possibility that hard copies of games will drop with the fluctuating value of the pound. That may be the only silver lining when it comes to price.

Securing Overseas Talent

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With uncertainty surrounding the UK there is potential for large game developers to reduce their investment in UK office.This may take up to 2 years to make an impact on the video games industry but if Scotland have a referendum to stay in the EU then there is high possibility that these large companies will relocate to Scotland to remain in the EU and continue trading as normal. This will ultimately result in a talent deficit in the UK which makes the UK less competitive with regards for game development. In short, this could mean the UK will be importing far more games over the next few years. When this is coupled with a potential shift in price then it isn’t hard to work out that gamers may be living a very expensive lifestyle making it less accessible to the general public.

British Recession

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Many Brits are worried the UK is at threat of entering another recession; a very likely possibility following the decision to leave the EU. If a recession hits the UK economy then this could have a potential impact on the video games industry. In the past the video games industry was quite demographically specific to young males but this has since broadened to become a general activity enjoyed by children and adults alike. Since this industry has hit a mass market then our video games industry could be hit hard by a UK recession. The implications of this is yet to be seen as the UK market will still be considered an important market for large video games companies but our ability to spend money on luxurious gaming products may well deplete over the next few years.

What do you think?

The aftermath of the Brexit verdict is still very much a case of uncertainty. It is hard to predict exactly how UK and international video games companies will react and how the UK economy will change during the exit process so these predictions may well end up being completely false. So do you have a different opinion of what may happen? Share your views in the comments!

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