Report: UK games industry shrinking

Last month, Uk-based SCi Entertainment announced it would be opening a studio in Montreal, Canada, which would be developing four new games for next-gen systems. And the Eidos and Lara Croft parent company is not the only one jumping ship, the Financial Times reports.

According to a survey undertaken by Tiga, the UK trade association for game developers, there were 400 independent game studios in 2001--but the figure has now more than halved to 150.

Initiatives from countries such as Australia and Canada, which offer enticing incentives for game companies relocating to those regions, are clearly working, as many international gaming companies have moved in--which may account in part for the drop in UK studio numbers.

In Australia, in the state of Victoria (home to the city of Melbourne), the local government is offering A$375,000 (approx $310,462) over two years to locally based game developers, and in Canada various incentives are offered, including grants and tax breaks.

Other reasons for the drastic drop in the number of British game companies include businesses closing, for example Argonaut and Warthog, or takeovers by big boys such as Microsoft, which bought Lionhead Studios a year ago.