Shadow Culture Minister Ed Vaizey said despite its accomplishments, the UK games industry is "under threat" from lack of government support and rising global competition.
"Global competition is incredibly fierce, and high development costs in the United Kingdom are slowly killing the industry," said Vaizey in a speech given at the London Games Conference. "Given what is happening, you would expect our Government to be acting urgently."
But he said that the government's support is lacking, particularly in relation to other countries including France, Germany, South Korea, Japan, and the U.S. "Britain will probably lose its temporary third place to Canada and South Korea, and be out of the top five next year, replaced by China," Vaizey forecast.
He said while the games industry grew 20 percent in the last two years, the UK has "lost 44 studios representing 15 percent of the sector." Vaizey added, "[National Endowment for Science, Technology and the Arts] research indicates that external investment in privately operated UK developers has dropped by 60 percent since 2008 and that employment is down 4 percent."
Vaizey further painted a gloomy outlook for the games industry in the UK, which is home to companies like Rockstar, Splash Damage, Ruffian, Realtime Worlds, and others. "NESTA’s research suggests the UK video games sector could shrink by 16.5 percent over five years, resulting in the loss of more than £180 million in external investment and nearly 1700 jobs."
Conservative politician Vaizey also said, "As in so many other areas, Labour ministers simply do not seem to care that we are falling behind our competitors in a critically important economic growth area."
He said that the games industry in the UK can thrive not only by through oft-demanded industry-specific
tax breaks, but also through venture capital, piracy control in light of increasing broadband speeds, and more support for video game industry-related education.