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The UK public has voted to leave the EU.

Following the news, the value of the Pound dropped to its lowest level since 1985 against the US Dollar, and the FTSE 250 slumped 11.4 per cent - at the time of writing.


The UK could also lose its top-end AAA credit rating, with S&P chief ratings officer Moritz Kramer saying the score was "untenable under the circumstances". S&P is the last major ratings agency to have kept the UK at the highest score; Moody's and Fitch, the other two major agencies, downgraded the UK in 2013.

All of these factors have the potential to affect the UK games industry, which exports heavily but also recruits internationally. The cost and legal hurdles of recruiting talent from outside the UK could also be harder, both from a logistics view and in terms of offering competitive salaries. On the flip side, a low Pound may increase sales outside of the UK, but the value of those sales will be worth, in theory, less.

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But how is the UK games industry responding to the news?

On an official level, pragmatism and caution is being called for. Jo Twist, CEO of Ukie, the trade body for the industry, has issued a statement on behalf of the organisation. It reads: "Ukie is committed to ensuring the UK is the best place in the world to make and sell games, and although this decision and the political uncertainty it brings will have an impact on our businesses it is important to remember we are already a globally successful sector and a leading exporter in the digital economy."


"Ukie will continue to work hard with colleagues in government to ensure we continue to have the best possible business environment and we will be following developments closely as well as advising members as they unfold," Twist added.

Further official statements have been provided by Tiga, the UK games industry's trade association.

"For the video games industry, it is particularly important that policy makers ensure games companies have access to sufficient finance, benefit from Video Games Tax Relief and R&D Tax Relief, have clear and stable IP rights and can access highly skilled people from outside of the UK," TIGA CEO Richard Wilson said. "Any new points based migration system must not be onerous or complicated, otherwise the industry's growth could be held back."

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Wilson's full statement, and TIGA's list of priorities for the games industry, can be read here.


Developers themselves are less optimistic though.

"In the short term, we have X amount of Pounds to spend on development but this is now worth quite a lot less already - meaning we cannot afford as many hours of labour, especially if we are looking to contract abroad. This means less game content," said Katie Goode, creative director at VR developer Triangular Pixels. "Our tiny saving grace is that Valve and Unity pay us in USD. We are going to have to talk to the bank to see how we can keep this as USD and look into paying contractors in USD."

Triangular Pixels is still a young company, founded in 2014. As a specialist in virtual reality though, it's aiming at one of the biggest growth sectors in gaming. However, it's also based in Cornwall, one of the poorest areas of the UK, and one that receives significant EU funding. Goode fears Brexit will negatively affect the region.

"Our EU funding won't be immediately cut in the next couple of months, but the scheme in Cornwall to get more game studios started here is now massively under threat," Goode added. "This means there's really not going to be much of an indie studio scene in Cornwall now."

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As a region, Cornwall voted 'Leave', yet has asked for reassurance it won't be worse off.

Goode continued: "I'm seeing many of my industry friends having a serious look into moving away. The UK games industry will be much worse without them. Though when I say 'UK games industry', what I mean is England and Wales - I suspect that Scotland will see a boom as they have another referendum, leave the UK, and join the EU."

Other businesses are remaining cautious, but hoping a Brexit doesn't cause a recruitment crisis.

"We are entering a period of uncertainty but the UK People voted and this has to be respected. Team17 are committed to continuing to develop our sustainable business with all of our partners around the world," says Deborah Bestwick, managing director of the Worms developer.

"On a more local level, our hope is that all progress the industry has made thanks to the efforts of both TIGA and Ukie will remain in place (access to finance and favourable tax environment amongst many other things)," Bestwick continues. "As a creative industry, we rely on talented people, and talented people are spread around the world so we need to make sure we can continue to ensure our industry flourishes despite today’s referendum results."

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Coatsink Games' Tom Beardsmore is less upbeat, and is already planning to move the company out of the UK.

"I'm utterly shell-shocked. I'm so disappointed in 51.9 per cent of my fellow countryfolk for allowing this to happen," Beardsmore says. "I fear that out voters will quickly see their situations go from bad to worse, too. On a personal level, I feel ideologically disconnected from the country now. In fact, our entire team - not to mention industry - appears to feel that way. As such, we're going to look at opening an office abroad imminently, and go from there."

As with speculations before the referendum, the actual results are going to affect the industry on a grander scale than just developers. "From a purely business point of view, it is a scary prospect and we have already seen how the Pound has collapsed in only a few hours," says Renaissance PR CEO Stefano Petrullo. "I am genuinely worried about how the economy will cope with this situation and [if we] can react to this will of isolationism. We live in a connected world, we need each other: I stand for that, together with the other people that voted for remain in an imperfect EU, trying to change it from inside."

"Having said that and despite the heavy disagreement in leaving, as an industry we have all to work harder, and together, to make the best out of it in keeping the UK games industry growing despite all the difficulty the referendum results will summon," Petrullo adds.

Green Man Gaming CEO Paul Sulyok agrees, telling WIRED: "The decision to leave the EU brings uncertainty and hard times ahead for the country as a whole which could be a significant issue for the economy."

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As with developers, recruitment and EU support is also of concern to Sulyok. "As a tech start-up hub for Europe, the UK has been able to attract a strong talent pool of specialist engineers and creative talent that has helped us build a successful video game industry," he says. "This uncertainty may not only affect this talent pool but also make it more difficult for UK developers to attain funding from European investors and funds to help build and market their games."

Rami Ismail, one half of Netherlands-based developer Vlambeer, offered a somewhat calmer outlook from an international perspective, and how the UK may not actually leave the EU.

Posting on Twitter, Ismail said "A lot of the falls right now are immediate responses. Markets and exchanges will slowly stabilize. We won't know what's what until they do." He added, "The UK PM resigning without triggering Article 50 - the separation clause - still makes it possible to avoid an actual Brexit."

"If the damage to the UK is immediate and obvious enough, it might be possible to delay it, and then run a campaign on reversing the Brexit," Ismail suggests. "If Article 50 is triggered, the separation is no longer reversible, and a return to the EU would be per Article 49. But until Article 50 is triggered, the UK remains in the EU, & there is room for a second referendum or other ways to avoid the Brexit."

However, Ismail also cautions "I fear even avoiding Brexit won't be able to restore EU trust, or rifts within the UK. You can't cause this much chaos without consequence."

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Updating as responses arrive

WIRED's original story from 17/06/2016: "What would an EU exit mean for the UK games industry?" has been preserved below

The referendum on the UK's membership of the European Union is now less than a week away, and whatever the outcome, businesses of all stripes will be affected. Having already looked at how British science and technology would be affected, WIRED now asks the games industry how it is responding to the possibility of Brexit.

The industry's importance should not be underestimated. As of the end of 2014, the gross value added to the country's economy by the gaming sector was £36.578 billion – more than films, TV, music, publishing, design, fashion, and architecture combined. According to Creative Skillset, the UK's skills body for the creative industries, 10,300 people were employed in the games industry as of 2015.

Research from trade body Ukie shows that the UK games industry punches even harder on an international level. Aided by global smash hits such as Rockstar's Grand Theft Auto, Rocksteady's Batman: Arkham titles, and the Lego franchise developed by TT Games, the sector generates £2bn in global sales each year. Ukie says 95 per cent of UK games businesses export "at least some" products or services to overseas markets, with an average 45 per cent of a UK-based games company's turnover generated from international sales. The UK is also currently seen as a leading investment destination for overseas games companies, in large part because of its access to the wider European single market – an economic area encompassing more than 500 million potential customers.

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As the referendum approaches, mere fears of a Leave result have begun to affect the international financial markets, with £100bn wiped off the FTSE index in the span of four days earlier this month. The value of the pound has also fallen.

But how do the UK's games businesses themselves feel about the possibility of pulling out of the EU? Overall, support for Remain is strong. A poll commissioned by Ukie in April found that 80.6 per cent of respondents "agreed that, taking into account the interests of their own company, a decision to remain in the EU would be most beneficial to the UK." Only 3.2 backed Leave. In its latest survey, Ukie found that 92 per cent of respondents were "either very positive or fairly positive about the industry future should the UK Remain", while only 19 per cent "were as positive should the UK Leave". A majority – 71 per cent – said they were not very or not at all positive about the future in the result of European secession.

Many larger companies, including Sony, Ubisoft and Square Enix, declined to comment when contacted for this article.

A case for Remain

None of the individuals or businesses WIRED contacted were in favour of leaving the European Union. Some, however, erred on the side of caution.

"As an individual, I will be voting Remain, but the business implications are not as obvious as you would think," says Cliff Harris, founder of Positech Games, developers of Gratuitous Space Battles and the Democracy series.

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"[If] Brexit crashes the pound, as a business that gets paid in dollars, that's actually a huge positive," explains Harris. "On the other hand, it may make it harder to employ people from Europe, which would be a big negative for developers like me who use a lot of subcontractors. On balance I think Brexit would be bad, but not Armageddon. Maybe Armageddon-lite."

“On balance I think Brexit would be bad, but not Armageddon. Maybe Armageddon-lite” Cliff Harris, founder, Positech Games

Team17 is best known for the long-running Worms franchise. Founded in 1990, the company is a veteran of the industry, and managing director Deborah Bestwick is against Brexit. "Team17 is one of the longest-running British owned game labels. We have partners all over the world," says Bestwick. "As a business we do not think leaving EU is a good move for both the economic side of the business and the recruitment one. [The] UK games industry is strong and talented also thanks to people coming from across the world."

Deborah Bestwick, managing director of Worms developer Team17, says "we do not think leaving EU is a good move for both the economic side of the business and the recruitment one." Team17

Mark Morris, director of Introversion Software, the studio behind Prison Architect, was one of the few people WIRED spoke to who wasn't immediately a supporter of Remain. While acknowledging that the Introversion team were "split on the issue", and the caveat that he was offering his personal rather than corporate views, Morris said "I'm your classic swing voter. I started out in favour of us leaving the EU, but as time went by and I started actually looking to find evidence and facts to support my beliefs, I found that much of my previous thinking was wrong."

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"I think the Brexit campaign has utterly failed to make the case for an economic improvement once we have left," claims Morris. "They have not set out a meaningful route-map to our post-EU trade nirvana and mutter platitudes about how Great Britain is a trading nation that will be great at negotiating great trade agreements. It is my personal view that the EU is unlikely to want to rapidly negotiate a trade agreement skewed in our favour, because to do so would gift ammunition to the right-wing movements that are gaining in popularity across the Eurozone and prompt further splintering of the Union."

Morris also echoed Harris' concerns over employment in the event of a Leave result, while touching on one of the most contentious areas of the referendum: immigration. "I look for talent in the people that I work with and recruit with a global view. I believe the UK is a richer place, culturally and financially because of immigration," he says. "The UK government does have the sovereignty to control non-EU immigration, but has utterly failed to do so. Why do we think that that leaving the union will suddenly cause a shift in our domestic immigration policy? Even if shutting one half of the door seemed appealing, the free movement of people seems integral to a successful trade arrangement and I don’t believe we could, or should, get away from it."

Building British businesses

A strong argument for Remain is the support that nascent games companies can receive from the European Union. Tom Beardsmore, of Chip and Esper developer Coatsink Games, says EU membership has greatly benefited the Sunderland-based business, founded in 2011.

"The European Regional Development Fund [EDRF] has supplied us with between £100,000 and £150,000 worth of grants since our company's inception," says Beardsmore. "Without those grants, which directly support job creation and maintenance for many of our 35 team-members, our company would not exist in the state it does today. Brexit would leave a huge question mark above job creation support in the north, which would affect many industries and businesses."

Sunderland-based Coatsink Games, developers of Chip, above, and Esper, has benefitted from the European Regional Development Fund Coatsink Games

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Beardsmore also praises freedom of movement and the opportunities it gives businesses. "Without easy access to international talent where it's made sense, we wouldn't be the studio we are today."

"Couple this with the number of EU business partners we've worked with and we're concerned by what a Brexit win would mean for us," he adds. "This concern means that we, as a company, will seriously consider leaving the UK if the nation votes out. Personally, I believe it would be a step backward for our country."

“Our biggest [concern] is how much support we get from the EU to encourage high tech industry growth in areas which have been left to rot by generations of UK governments” Katie Goode, creative director, Triangular Pixels

Katie Goode, creative director at VR developer Triangular Pixels, agrees. "As a business, we're really worried about the possibility of the UK leaving," says Goode. "Out of many concerns around hiring, trade, growth, et cetera, our biggest is how much support we get from the EU to encourage high tech industry growth in areas which have been left to rot by generations of UK governments."

Founded in 2014, Triangular Pixels has already benefited from EU support, including free business coaching. Goode adds that there are also incentives to employ graduates "to help stop the brain drain, especially from poorer areas of the UK" and "project funding we could get if we're looking to investigate games and VR with the sciences".

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Triangular Pixels has also received support through the EDRF. "Cornwall, where we are based, is among poorest areas of the whole of Europe. The EU brings money out of London to poorer areas, and to growing business like ours," says Goode. "Leaving the EU will mean studios moving to areas of the world where they are supported, leaving the UK in the dust and to what remains of farming, shelf stacking and manufacturing, before the take over by automation."

More than developers

It's not just games developers that aren't comfortable with the prospect of Brexit. Other parts of the industry are similarly concerned about a potential break from the Union.

"Over the past 20 years the UK has become the tech start-up hub for Europe, attracting a strong talent pool that's helped to build successful British tech and video games companies. Part of that success is based upon attracting specialist engineers and creative talent from Europe," says Paul Sulyok, CEO of digital retailer Green Man Gaming.

"Today, UK developers looking to build and market their games have the option of attaining funding from European regional funds such as Creative Europe," adds Sulyok. "Clearly, if the UK leaves the EU then we lose access to that talent pool and access to European funds for developers, which could be a significant issue for the economy."

“We live in a connected world, and isolationism will not help to solve the problems that the Leave campaign is pushing to get votes for” Stefano Petrullo, CEO, Renaissance PR

Even the games PR sector could be negatively affected, says Stefano Petrullo, CEO of Renaissance PR. "In the case the Leave campaign wins, I believe my business is at risk of being negatively affected due to the economic backlash that the whole UK economy will face," says Petrullo. "[This will stop] my company's growth plans, limiting potential hiring and result in an increase of the fee I charge to my clients, especially the ones in the EU."

"We live in a connected world, and isolationism will not help to solve the problems that the Leave campaign is pushing to get votes for," he continues. "As a PR, I strongly believe in dialogue and interaction with people. Part of my job is conflict resolution and as a communicator, it is clear that the Leave campaign has spun concepts with no facts."

A case for Leave?

One of the few dissenting voices was Euan Lamont, CEO of Legendary Games. In an article hosted by trade association TIGA, Lamont was critical of elements of the EU's bureaucracy, particularly when it comes to digital businesses.

Mark Morris of Prison Architect developer Introversion Software initially supported Leave before finding "that much of my previous thinking was wrong" Introversion Software

"[The EU] makes the assumption that we are all super big mega corps like Facebook and Microsoft so we are increasingly burdened with rules that are hard to implement and at best pointless," wrote Lamont. "A great example is the legislation on cookies…really is forcing companies to put cookie warnings up and users to click a button making life better?"

“[The EU] makes the assumption that we are all super big mega corps like Facebook and Microsoft so we are increasingly burdened with rules that are hard to implement and at best pointless” Euan Lamont, CEO, Legendary Games

Lamont also decried changes to pan-European VAT laws. A 2014 decision aimed at stopping the likes of Amazon, Apple, and Google from exploiting tax loopholes by establishing European headquarters in low-tax countries such as Luxembourg negatively impacted smaller businesses.

"We and 460,000 other [small and medium-sized enterprises] in the UK are now affected by a rule that requires us to charge and account for VAT in each of the 28 member states where we sell to, rather than just the one we sell from," he wrote. "This is an admin nightmare and has stopped us selling direct to EU consumers."


Get out and vote

TIGA, like Ukie – both of which represent the UK's games industry – remains officially neutral on the referendum.

"Like many trade associations, TIGA as an organisation is neutral on the issue of Brexit. There are divergent views amongst games developers about Brexit," Richard Wilson, TIGA CEO, tells WIRED. "Some developers cite the damaging impact of EU regulations on small UK games development businesses as a reason for voting for Brexit. Conversely, developers in favour of Remain typically note the advantage of being able to access the entire EU for highly skilled development staff."

"Whatever the outcome of the referendum result, there will be important economic, constitutional and political implications," continues Wilson. "We urge all developers to exercise their right to vote."