According to TIGA, the UK games development sector is experiencing its "most severe downturn on record"

The UK’s video game development industry is undergoing its "most severe downturn on record," experiencing a 4.5% decrease in employment compared to the previous year.

A report by TIGA titled "Making Games in the UK" reveals that 491 companies eliminated 3,655 full-time positions from May 2024 to September 2025, while 513 expanding studios created 2,751 new jobs.

In this timeframe, the total number of employees decreased from 28,516 to 27,347, despite the freelance workforce expanding to over 4,245 contractors.

Currently, 2,110 game development studios operate in the UK, a decline from the 2,175 recorded in 2023.

During the examined period, 206 companies closed or exited the industry, accounting for 10.2% of all firms studied.

Significantly impacted were studios with over 15 employees, leading to roughly 1,800 job losses. In contrast, smaller studios continued to grow, with companies employing one to four people expanding by 3.2%, and those with five to 15 individuals seeing a 9.2% increase.

Employment falloffs at console-oriented studios were lower at 2.1% compared to larger reductions of 12.9% and 13.2% at mobile and PC studios, respectively.

New studio formations faced persistent challenges, witnessing over a 30% decrease for the third year in a row, dropping from 281 to 137, marking the lowest point in 15 years.

TIGA attributes the declines in employment, layoffs, and sluggish growth of studios to "weak global sales, poor early-stage financing, and post-pandemic restructuring."

The organization has called on the government to increase the Video Games Expenditure Credit by applying a 53% rate on 80% of costs for projects under £23.5 million to enhance the sector's GVA.

This change could potentially boost the industry’s GVA by £482 million and generate close to 7,000 jobs, including 896 development positions.

Additionally, it recommended enhancing the UK Games Talent and Finance CIC to support studio launches, expansions, and growth.

"The UK video games sector, being the largest in Europe, boasts top-tier talent, studios, and educational institutions," stated TIGA CEO Richard Wilson. "Despite generating £12 billion in GVA per prior research with the University of Portsmouth, the industry is now facing an unparalleled decline following 14 years of continuous growth. Absent effective policy measures, the risks include losing numerous skilled positions and falling behind internationally supported competitors."

Wilson emphasized, "Strengthening the VGEC could result in thousands of new development jobs, fortify studios financially, enable innovative IP development, and reinvigorate sector growth."