Defining Gaming: a supply chain approach.

Videogames have been building a strong fanbase for decades, securing a stable demand. This situation has helped creating an industry around the creation and commercialisation of videogames, as well as other entertainment products. However, there is not a specific SIC for the gaming industry, making it difficult for planners, analysts and marketers to understand the industry. At Data City, we have decided to create an RTIC to define the videogame industry. Our data sheds light over an unresearched economy and allows us to understand gaming in-depth.

A supply chain taxonomy for Gaming

There are several taxonomies for gaming focusing on genre or videogame technology. However, these are not the most efficient ways to understand the industry. For this reason, we created a taxonomy representing the gaming supply chain. We want to note that our taxonomy excludes companies developing gambling games. Our decision to exclude gambling games is consistent with the Ukie’s -the trade body creative games and the interactive entertainment sector in the UK. Ukie makes a distinction between virtual games where virtual currencies or items cannot be converted into cash; and gambling platforms, which allow users to convert them into cash.

Therefore, our taxonomy only captures gaming companies, contributing to the reinforcement of a clear boundary between the gaming and gambling industries.

Gaming verticals

  • Enabling Tech: this category targets companies that develop technology products, like specialised software, for those that create games. We have identified 266 companies in this group.
  • Developers: these are the companies that create the games. Our data suggests there are 486 companies in this space, including international businesses like Sony, Nintendo or Electronic Arts.
  • Media: this segment captures companies that develop media products (audio, music or animation) to produce games. Often, game developers can develop these products internally, however, there are specialised companies providing media content. These companies feature the list and we found 306.
  • Immersive: immersive technologies are on the rise and it is no different in the gaming industry. For this reason, we created a taxonomy group exclusively targeting companies providing the necessary tech products capturing 234 companies.
  • Publishers: these are the people with the resources to launch videogames to the market. We found 185 of them, some of the likes of Warner Bros or Konami Digital Entertainment.
  • Retailers: this taxonomy group represents business dedicated to videogame retail. We have included 122 companies that exclusively dedicate to videogame retailing.

In total, we have found 1,093 companies in the Gaming space.

However, the supply chain taxonomy groups are not mutually exclusive, and there are companies captured in more than one. We have prepared a chord diagram below that represents the how many companies in each category where also captured in a different segment.

The diagram informs that “Developers” is the taxonomy group more interactions with the rest. In contrast, game retailers are the most specialised, only having few large companies (e.g. Sony, Nintendo and Electronic Arts) falling into other categories.

Financial findings

Ukie stated the “UK market for video games reached a record £7bn in 2020“. However, our data estimates a turnover value of £13.4bn for 2020. This is a significative difference that leads us to believe there is a need for better tools and methodologies to understand the industry. Our RTIC approach to gaming can fill this gap, allowing the articulation of verticals following current market practice. This is crucial, as far as the industry employed approximately 48,400 people across the UK, and has the potential to grow in the upcoming years.

Besides, our data shows that most of the companies in the gaming industry are SMEs: only 24 of the companies in our database employ more than 250 people. In contrast, 412 were micro business with less than 10 employees. Therefore, more than the 37% of the companies making up the gaming industry are either start-ups or microbusiness, highlighting the contribution of small enterprises for the industry as a whole.

Mapping Gaming: a local authority view

Understanding the spatiality of the industry is key for investors, planners and related economic sectors. Our data allows for different geographical analysis and visualisations, shedding light over industrial geographies. Below you will find an interactive map representing the number of gaming companies in each local authority.

Our data finds that Westminster, Camden and Hackney are the local authorities locating more gaming companies. However, Brighton and Hove, Leeds, and Manchester appear as incipient hubs that, with the right management and investment, can turn into significative nodes at national scale.

Wrapping up Gaming

We have not only provided an approximation of the industry’s size and value, but a method that permits more reproducible analysis. Nowadays, a platform and a methodology  producing real-time data while articulating emergent economies into industry verticals are critical. The reason lies in the fact that emergent economies are fast-paced, and can experience drastic changes in a matter of years. Our Gaming RTIC will facilitate the process of adding new industry verticals, technologies or processes affecting the production of videogames.

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