Recap: Money 101 for Game Devs

Our ‘Money 101 for Game Devs’ workshop in association with RIFT covered how developers can get money back on their production costs from the UK government through tax relief. The gaming industry in the UK is the 6th largest in the world and produced over £3 billion of revenue last year. Despite this success, there has recently been talk about an ‘indie apocalypse’ where small studios are struggling to fund their work and then struggling to sell it. However, with the advice from our speakers as well as the help from the government, this apocalypse can be avoided.

Liam Dowe of RIFT, provided insight to the VGTR scheme how RIFT can help game developers complete a successful application.

• ‘VGTR’ is a new tax relief created in April 2014 to reward UK-based game developers.
• This program was put in place to entice development in the UK and encourage developers to stay in the country

• The most difficult part of obtaining VGTR is the BFI-certification, which scores your game on “Britishness.”
• The sections of BFI cover cultural content, cultural contribution, cultural hubs and personnel, not the inclusion of British-themed things in your game.
• There are costs that qualify and do not qualify. When filling out your application, it is important to only include goods and services related to production to avoid your application being denied.
• RIFT handles 40,000 tax claims each year and has achieved £100 million reclaimed from HMRC.

Gary Townley of the Intellectual Property Office explained what types of IP game developers can protect as well as what developers should be mindful of as they are building their games.

• Although protecting your IP is not necessary, the overall value of your IP will most likely outweigh the value of your fixed assets. For example, Uber Taxis do not own any taxis (fixed assets). Rather, they own technology (IP), which is where their overall value lies.

• The most important types of IP gamers should think about protecting are trademarks and copyright with copyright being the most important (and it’s free!).
• When you are developing your game, you should ensure that you are not infringing upon anyone’s IP.

Games Specialist Dan Licari shared his experiences with helping developers connect to funders and investors as well as the trends of investing in the gaming industry.

• Development companies should consider SEIS or EIS to attract more investments.
• In the past 18 months, there were more SEIS investors than investor propositions.
• Because of the growth of the gaming industry in the past few years, there are now metrics that show investors that they can make money from games.

John Keefe, founder and CEO of Draw&Code and SwapBots, spoke about how he utilised VGTR to bring his game to where it is today.

• John utilised both R&D relief and VGTR, specifically through the UK Games Fund, to help his game, SwapBots. His total relief came to about £100K.
• He qualified for SEIS, which brought attention from investors. Ensure that you can properly pitch your game to gain the most from them.
• If you have a large following, it could be beneficial to go through Kickstarter to raise even more funds.
• SwapBots will be making its debut on Amazon in the next 3–4 weeks.

During our panel Q&A discussion, the speakers gave the following advice:

• Look to copyright your material rather than patent it. Patents must be brand new, so this is difficult to prove when you have been working with numerous people on your game.
• If you are looking to grow your company, make sure that you understand what you need to get to the next step in terms of time, money, personnel, etc. If it’s out of reach, see what resources you can utilise to get you where you want to go (accelerators, new cities, contract workers).
• When looking for investments, understand what you don’t have first. Be sure that you can show investors that you can successfully run a business, but keep in mind that you will always underestimate how much you need.
• People will invest in a solid team.
• When going through the VGTR application, you can have employees from the EEA on contract and qualify. Your company, however, must be in the UK and money must go through the UK banking system.

Looking to continue to beat this indie apocalypse? Join us at our Startup Conference on Sept, 26th to hear advice from experienced entrepreneurs and top funders and service providers! Secure your tickets here.