he lockdown boom in video games has put the spotlight on the global success of British game makers, attracting the attention of deep-pocketed US giants looking to snap up valuable pandemic-proof businesses. Electronic Arts, the California-based global gaming giant, announced a surprise £945m bid for Codemasters, the maker of Formula One racing games. EA’s offer, which has been recommended by the Codemasters board, is almost £200m more than that tabled last month by its rival Take-Two Interactive, the maker of games including Grand Theft Auto, which is expected to rejoin the bidding war with a sweeter deal. The gaming industry has proved to be a coronavirus winner, with tens of millions of consumers looking for relief from lockdown boredom and Britain’s pedigree ensuring excited investors sent stocks soaring. The handful of UK game developers that are listed on the London stock market, including the Warwickshire-based Codemasters, have all experienced share price surges of more than 100% this year. Industry veterans are not surprised by the latest boom, pointing to Britain’s history of creating world-class games. “The UK is a very creative nation that has led globally in film, TV, fashion, advertising – and gaming is no exception,” says Ian Livingstone, the chairman of the games developer Sumo Digital, a co-founder of Games Workshop and the creator of multi-media phenomenon Warhammer. “In the 1980s there were titles like Elite and Populous, as games consoles arrived in the 1990s, Tomb Raider and Grand Theft Auto, and now with mobile platforms games like Fall Guys and Golf Clash. The UK has been responsible for creating many global franchises but often outside the industry that value isn’t seen.” Indeed, EA’s foray into UK gaming is just the latest by foreign companies spying an opportunity for a land grab. More than a decade ago it was Sega of Japan that moved to acquire Sports Interactive, the Islington studio behind Football Manager and Championship Manager, and Creative Assembly, which makes titles including the Warhammer: Total War series. Roll the clock back 20 years and it was the New York-based Take-Two, which is currently in pursuit of Codemasters, that snapped up DMA Design, the Scottish developer behind Grand Theft Auto and Lemmings. In addition to the boom in game playing, the ability of developers to continue to work practically unhindered by the virus is a significant factor for investors keen to back pandemic-proof businesses. According to the industry trade body Ukie, during the pandemic games makers maintained 80% to 90% productivity, none reported a revenue decline and a quarter have had to boost staff numbers to keep up with demand. The British maker of Fall Guys, the multiplayer online Teletubbies-style athletics tournament that has become a global phenomenon, has had to triple staff. “When Fall Guys was released in August we had a core team of about 35 people on the project,” says Dave Bailey, a co-founder of the developer Mediatonic. “Nothing could prepare us for what would happen. The game sold more than 11m copies on PC and became the most downloaded PlayStation Plus game in history within about 60 days. We’re now approaching around 100 people working on Fall Guys.” While it is the streaming revolution led by companies such as Netflix and Spotify that grab the headlines, at £4bn the gaming industry is the same size as the music and video markets combined in the UK, according to the Entertainment Retailers Association. The UK video games industry is the biggest in Europe, and the fifth biggest in the world, behind the gaming juggernauts Japan, South Korea, China and the US. “There is scarcity in the ability to create high-quality gaming content,” says Neil Campling, a media analyst at Mirabaud. “Like a film, a top-tier title can cost $100m-plus and take up to four years to create. But with physical and digital routes to market, and players buying add-ons, if you get it right the margins mean it can be a licence to print money. We have been predicting mergers and acquisitions in gaming for a while, we are seeing the start of a wave.” The government tax relief that has enticed billions of investment from companies such as Disney or Netflix to make content from Star Wars or The Crown in the UK has also helped to drive the games industry. In August, the government revealed that £355m was spent making more than 150 video games in the UK that claimed tax relief in the year to the end of March. Since the tax relief was introduced in 2014, about £3.7bn has been spent making 1,375 video games that made relief claims. A hallmark of the UK gaming industry is a remarkable geographical diversity unmatched by any other creative sector in the UK. More than 50% of the 50,000-strong workforce employed in gaming in the UK are based outside London and the south-east. None of the five gaming companies listed on the London stock market are headquartered in the capital, instead choosing locations including Sheffield, Wakefield, Cambridge and Codemaster’s base in Southam. The global GTA franchise continues to be creatively led out of Edinburgh, by Take-Two’s Rockstar North unit. Wakefield-based Team17, the 30-year-old publisher of evergreen favourite Worms, says in the globalised world of gaming there is no drawback to localised operations. “I’ve worked at a lot of companies in the UK and also overseas,” says Chris Coates, the head of studio at Team17, sporting a Christmas jumper via a Zoom call from his home in Leamington Spa. “I’ve worked at startups where we barely had an office. We may be considered to be in quite a small bubble in Wakefield but we are a globally connected company. We have [employees] from all over the world.” Ukie has identified 23 towns and cities across the UK – from Newcastle and Leamington Spa to Crawley and Horsham – where game developers have created jobs adding up to £60m to the local economy. “We aren’t London-centric like other creative industries,” says Jo Twist, the chief executive of Ukie. “The government is looking to ‘level up’ the economy across the country, a term that actually comes from gaming, you could say we as an industry are already experts.”