Insight: How Scotland became the beating heart of the video game industry and the revolution ahead

If you’re reading this, the chances are you are one of the 40 million people in the United Kingdom who regularly play video games. Enjoy Wordle? Keep up with Duolingo? Or simply play Call of Duty? Consider yourself a gamer, involved with one of the biggest industries in the world, and a sector where the most interesting work of all is happening in Scotland.

It’s important to establish first this isn’t a new trend, Scotland has not suddenly become the epicentre of a £174 billion industry, in fact, it’s played a huge role in some of the earliest games, as well as their explosion into the mainstream.

Brian Baglow, founder and director of Scottish Games Network and Scottish Games Week, explained Scotland’s role was down to the successes of games such as Lemmings and Grand Theft Auto, as well as the manufacturing of the Sinclair computers in Dundee.

Currently writing Scotland’s National Games Strategy, Mr Baglow, who was one of the writers on the first Grand Theft Auto, told Scotland on Sunday that Dundee had become the “beating heart” of the industry, but by not being considered as grown-up as other sectors, it had been able to stay.

He explained: “Nobody took it seriously, so it was allowed to remain in Dundee, rather than being dragged kicking and screaming to Edinburgh or Glasgow, or more likely London. We actually had in the early 90s six game studios across Scotland, three of which were in Dundee.

“There’s a real thread of history that goes all the way through, and because of those early successes, Bell Street Tech, the college in the middle of Dundee, was looking for a way to do something different, so when it became Abertay University, they ended up deciding it actually might be an idea to create a video game degree. They were the first institute in the world to offer a games degree in design and development, which was in 1997, the year Grand Theft Auto came out.

“They’re still in the top 25 institutions of the world, so Dundee is still very much the spiritual home of games in Scotland.”

Dundee is now home to over 40 video game companies and start-ups, as well as the UK Games Fund, a non-profit community interest company established to help develop the UK games development sector, particularly at the early stage.

Its founder and Chief Executive, Paul Durrant OBE, explained Dundee had become the “natural home” for video game investment, with the sector a crucial part of the city.

He said: “Because we serve the UK we have a pretty good picture of where Scotland sits in terms of the UK.

“There are some subtle nuances around that, pretty much games development is happening across the UK proportionate to population, although one likes to think of clusters in cities related to certain industries, and while gaming certainly has some concentration of that, one of the things that differentiates that in Dundee is a) the length of time that has been a feature of the city, we really are going back to the 90s.

“B) things are pretty centralised in one area of the city, so there’s lots of space for interaction. That length of time means it has reached maturity so we have founders who have essentially come good and reinvested in both games and other areas. It’s quite interesting to see a sector of an industry that has had a place in the city for quite some time now.”

The UK Games Talent and Finance Community Interest Company was established in 2015 following George Osborne's March 2015 budget. An initial award of £4m has been renewed and refreshed several times, and the project is less about picking hits and more about building new games IPs that enhance the creative portfolios of funded companies.

Mr Durrant explained: “We’ve been in operation since 2015, having been established in the March 2015 budget. It was about the role that video games had in boosting the economy, essentially.

“You need a funnel of activity at a large scale to get some small successes, the idea of our mission is to keep that funnel viable and lively, and with these early stage companies to have risk reduced when creating new game IPs.

“We’re not really about picking hits, we’re not funding a game to become a great hit, we’re more about boosting the portfolio of creative work that’s been undertaken by these companies. That leads to a good number of them being successful.

“In the creative industries, all the individuals are driven by their portfolio. You could say the same about film. We’re trying to build that creative capital in the sector. Our investment is about helping those companies take the next steps and become viable.

“Companies often have to release a few games to have successes and failures to get better at it. We’re at that early stage when companies are still learning how to build games and release them.

“It’s not a party political thing, games have arrived and are recognised as being part of the vehicle for economic growth and promoting the creative industries in the UK.”

One of these smaller companies thriving is Sad Owl Studios, who won Bafta's best British video game award for Viewfinder. Originally created while one of its three-person team were studying at Abertay University, it also won best new intellectual property category at the awards earlier this year.

Co-Founder Georg Backer said Scotland had a “great video games community”, and one that extended beyond the cities.

He said: “Dundee has become a major hub for game development, Edinburgh is also a significant centre, but it stretches beyond the cities, video game development in Scotland is everywhere. There are a lot of great initiatives, such as festivals, industry meet-ups and regular talks. It's also wonderful to see that the National Museum in Scotland is currently displaying the Game On Exhibition. All these things matter a lot.

“It's a fantastic opportunity for the wider public to engage with video games from a cultural and historical point and to get to know the important role Scotland is playing with its wide range of talent and game studios, small and big”.

Describing the support offered in Scotland, Mr Backer praised tax breaks for video games and referenced the UK Games fund, but said there’s more to be done.

He continued: “The last 18 months in the video games industry worldwide were sadly riddled with layoffs and closures, causing a lot of heartbreak and insecurity amongst developers. The government and economy should fully embrace and support video game development, especially now and with the breath of talent that we have here. “People will always want to play games, it is part of our culture, and the more opportunity there is for the developers to make a wide range of different games, the more people will engage.”

The delightful Viewfinder won a Bafta for best British game | Viewfinder

Describing the BAFTA wins, he added: “Winning the BAFTAs meant everything to us.

“We were so humbled and happy to be already nominated, especially in a year full of so many truly excellent games. And to then win two BAFTAs, it was wonderfully unexpected and a moment of great joy and lots of emotions. To be recognised by the industry, by your peers, for all the hard work and challenges that we had to overcome to make this game, is truly special and unforgettable.”

Chris van der Kuyl is the chairperson of 4J studios, one of the most successful videogame developers, and one responsible for the multi-million selling and multi-award winning Minecraft Console editions.

He described games as the biggest global entertainment industry, hailing that several of its franchises are worked on in Scotland.

He said: “When GTA VI hits the market next year as we believe it will, it’ll be cataclysmic for all other forms of entertainment. It’s fifty times the size of a Marvel release when they were at their peak.

“The principal driving force behind that game is the studio in Edinburgh, and guess what, for the first time in Rockstar’s history, they’ve opened back up in Dundee.”

One of Scotland’s leading entrepreneurs, he also claimed games had a sweeping “cultural impact” on Scotland.

He explained: “Games culture is something that Scotland has a fairly unique setting and I think it's that proximity between the game's audience and the game's developers. I've used an analogy of Hollywood before which is ‘nobody in Holywood thinks it is a big deal to make a movie because they know people will do every day’. Nobody in Dundee thinks it is a big deal to make a game, because it’s just what’s there.”

4J Studios was also behind the console port of The Elder Scrolls IV: Oblivion to PS3, something he claimed those at Bethesda, its American creators, thought was impossible.

He explained: “The CEO of Bethesda called me up and told me ‘Todd Howard, who created the Elder Scrolls and modern Fallout games, he’s been into see me, and is telling me that PS3 Oblivion is impossible and it will take him two years and 60 people. I called bull**t, I bet 4J can make this happen, and we did it under a year with a lot less people.”

(Left to right) Aaron Garbut, Sam Houser, Dan Houser and Leslie Benzies of Rockstar Games, win the Fellowship Award at the British Academy Games Awards in 2014 | PA

Looking forward, Mr Baglow, currently writing a games strategy for Scotland, suggested the value of the industry could be even greater with more support, and perhaps changing their placing as a creative industry.

He said: “I am creating an action plan, so a series of recommendations to the government to increase knowledge and understanding of video games at all levels of government to create a more connected and collaborative ecosystem.

“As it stands right now, video games contribute over £188 million a year to Scotland’s economy. That’s ok, but by contrast, Finland in 2022 did the equivalent of £2 billion, and that’s because games are traded as tech. So there is much more we could be doing, we’ve got a thriving start-up scene, we’ve got a great education pipeline. But none of the people studying games have support to complete or publish video games, there is no support for creating new intellectual property.

“There is so much more we could be doing in Scotland, because of the devolved nature, because of the levers we have, because of the very different infrastructure, Scottish Enterprise Scottish development, International creative Scotland, there are numerous opportunities to understand and integrate games in a different way which simply don't happen across the wider UK.

“I have found the Scottish government hugely responsive, hugely receptive and very interested in finding ways to make the game sector far more integrated and far better supported.”

Mr Baglow also expressed excitement at what was to come, specifically the release of Grand Theft Auto VI, which is predicted to bring in billions for Take-Two Interactive, its publisher.

He said: “We've got less than 12 months before the eyes of the world, not just the gaming world, are on Scotland, because GTA 6 is coming out. That's our chance to say we made this, not only was it born here, it's still made here. The biggest game in the world, the most successful franchise of all time. It was born here for a reason, which is that we don't take anything that seriously and we decided to have a laugh with it. The jet black and tongue-in-cheek humour that has been present in every single game, is still there and I think it is unique to Scotland.

“We have this chance to show that not just what Scotland was, or what Scotland can be but what Scotland is, and a chance to make what Scotland is something very very different to any other country in the world.”