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Understanding Brexit

27 July 2016

UK developers have thrived with and without EU support for many years. So is the post-Brexit uncertainty worth any restless nights? We sent Will Freeman to talk to the experts 

Since the EU referendum Leave and Remain voters took to the polling stations late last month, those in the games industry have faced a great deal of speculation.

Things might become difficult for developers as a result of the Brexit vote. Or they may start to get better. Perhaps we'll see a little of both. All that is certain is that nobody absolutely knows.

There do, however, exist game studios that have thrived in-part thanks to the UK's EU membership, and others that have done perfectly well without. There's a value, then, in taking a look at examples across that divide; because if the future is presently harder to predict than ever before, it is useful to consider the potential for success regardless of what the coming months and years may bring.

"The primary benefits have been public funding and recruiting talent," says Ella Romanos of the boon EU membership has provided the various UK studios she has helmed or served. Romanos is a game developer and consultant with a wealth of experience across several outfits, including her current positions at Strike GameLabs and Rocket Lolly Games, and her previous time as CEO of Remode Studio.

"The European Regional Development Fund has prioritised regional development, and therefore has encouraged funding into areas including the South West, from which my studios have benefitted," Romanos continues. "Not only does the EU provide direct funding, but also UK-based organisations such as Creative England get much of their funding via the ERDF."

What's more, Romanos believes, EU membership has made recruiting from across Europe much less paperwork-heavy for UK developers, particularly when compared to securing talent from the rest of the world.

"If we move to a system where we have to go through a bureaucratic process just to hire someone from the EU – even if that process is made simpler than the current non-EU one, such as a points based system – it will cause problems, particularly for smaller studios who do not have the money, time or resource to support that process," Romanos asserts.

For Folk Tale studio Game Foundry, meanwhile, EU support has never been something the team has leaned on. Indeed, the developer has not once made use of any UK government initiative, and cites Valve as the ‘body’ it relies on most, thanks to the Steam store’s international presence.

"Brexit had a very real and immediate benefit for us, specifically due to weaker sterling," reveals managing director Simon Dean. "We operate almost exclusively in dollars, and so received an instant 10 per cent boost to the value of cash reserves. It also made our ongoing EU-based production costs more affordable."

Clearly, then, some teams have enjoyed a financial gain from Brexit, and before any EU departure has even been completed.

Other studios, meanwhile, have enjoyed benefits both through the UK's EU membership, and as a result of Brexit. That's particularly true of those that have come to focus on digital downloads targeting a global audience.

Two-person UK indie Strangely Named, for example, relied confidently on an EU initiative called ViViD to establish the company five years previously. Today, however, the team has no need to depend on such support as it puts the finishing touches on its kart racer Bears Can’t Drift!?.

"As a company that works within a global market, we are relatively well shielded from the consequences of the UK's decision to leave," offers Strangely Named CEO Arran Langmead. "We buy goods made in China from American companies, our software is digitally bought from America and our distributors – Steam and Sony – will keep on distributing our game around the world regardless of Brexit."

Furthermore, in today's global games industry, there are UK developers operating studios spread throughout Europe. Gareth Noyce moved to Finland several years ago to set up a satellite studio for his then-employer, a UK triple-A, inspired by local investment. But as it transpired, he set up in his new home solo, and now works with collaborators across the EU, with his business UK-registered.

"The freedom of movement afforded by the EU and the total simplicity of being a self-employed UK citizen – with a UK company – while working abroad gave me the opportunity to live in a country with a lower total cost of living," Noyce muses on the opportunities afforded by the UK's EU membership. "My first project would not have been finished as quickly, or to as high quality, without that, as I simply wouldn't have had the money to get to market. It's also made it trivial for me to live abroad and still do business with UK based sub-contractors and publishing partners, or work with local expertise where it was better and/or cheaper. As a solo dev this flexibility is key."

Ultimately, EU membership has proven extremely powerful for many UK studios. Equally, Brexit is already providing an immediate benefit to other games makers. And there are those that have experienced direct gains before and after the historic referendum.

Uncertainty absolutely still looms for developers as a result of Brexit, and yet there are reasons – for some studios at least – to feel measured optimism. The UK games industry has proved itself in previous years to be a resilient beast, and yet the notion that available funding options are set to undergo a dramatic shift in their make-up will no doubt trouble those that have previously thrived with support from the EU.

The games industry more generally, of course, has constantly had to evolve and shift with the furious evolution of technology over several decades. That experience, at least, may bolster UK developers' ability to adapt to a post-Brexit world, and embrace what potential the referendum result does bring.