UK gaming sector to grow exponentially, says CBRE

The UK gaming industry is growing. As pandemic boredom has driven more people to pick up video games and follow video game franchises, game companies have seen an influx of new customers and made plans to expand in response.

One of the first steps will be establishing up to an additional 1 million square feet of workspace in the next five years. Despite an overall downturn in office real estate, video game companies set a new record, taking up 272,000 square feet of office space even in 2021, when many companies were downsizing.

The story behind these statistics, which were collected by experts at the real-estate parent company CBRE, is that the gaming industry is in a period of dynamism, where studio acquisitions, competition between established companies and small indie brands, and collaborations between game companies and traditional media giants are at all-time highs. In the midst of all this, there is a talent shortage, and many companies are desperate to attract the best writers, designers, and programmers.

One way of attracting talent is to build a modern, comfortable office in an area where tech and creative professionals want to live. London, the South East and other major UK cities have stood out as video game boom towns, where an initial 1.1 million square feet of office space have been claimed by the industry (540,000 square feet of that is in London, with Leeds, the South East, Edinburgh and Manchester following up behind). The majority of the purchasers have been mobile game developers, whose sector has seen some of the most rapid growth in the past several years.

As well as the larger markets, some locations have become minor gaming industry hotspots, like Dundee, Horsham, Guildford, North Kesteven in Lincolnshire, and Royal Leamington Spa (nicknamed ‘Silicon Spa’).

Besides location, workspace design is one of the gaming sector’s main weapons in the war for talent. Gaming companies’ real-estate needs vary according to size and whether product testing is outsourced or handled in-house, but can include office spaces, studios, audio rooms, playtesting rooms, and more unusual spaces such as motion capture studios.

Unlike many other sectors, gaming companies aren’t necessarily interested in prestigious Grade A office buildings. Some favour character buildings, manufacturing plants, warehouses or even old airplane hangars. They pick spaces to suit their culture and circumstances and modify them to their needs.

Yet the tremendous growth in the gaming sector comes with challenges. The unprecedented deluge of investment is forcing tiny companies to upscale at speed, and many founders are finding themselves ill-equipped to manage such sudden change. While most gaming companies have enthusiastically adopted flexible working, they still need to ensure they have the physical space to scale up so dramatically.

The massive demand for new workspaces in the UK gaming sector is “symptomatic of a burgeoning industry”, says Jen Siebrits, Head of UK Research at CBRE. “There is all to play for, with those who put in place the right strategies to mitigate accelerating change reaping the rewards.”

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