Business | 24 May 2023

Financing Gaming and the Interactive Entertainment revolution

Our Interactive Entertainment Lead, Paul Franks, reflects on another successful London Games Festival and how Coutts can support a promising future for the gaming industry.

2023 was the third year we’ve partnered with the London Games Festival, hosting their launch party at our 440 Strand headquarters and bringing together some of the brightest prospects and sponsors of the UK gaming industry.

For me it’s always a special event. It’s hard to find a comparative sector that is seeing such an extraordinary growth trajectory and which is consistently innovating at such a pace. According to the World Economic Forum and PwC total global games revenue was $235 billion in 2022, and is set to reach $321 billion by 2026 (stat source: July 2022 PwC’s Global Entertainment & Media Outlook 2022–2026). What’s really exciting though, is how gaming companies are adapting to how we consume media – the big showcase games and franchises are more popular than ever but the ‘gamification’ of different markets, from food and energy, to education and learning, means the penetration of gaming into new growth spheres is only set to increase.

You could feel that excitement throughout London during the festival. The events held at venues such as 440, Trafalgar Square, Tobacco Dock and the Tower of London, brought together around 58,000 people, including families, schools, businesses, financers and investors – all looking to play and support the latest UK gaming innovations.

Coutts and interactive entertainment

We refer to gaming and its associated industries as ‘interactive entertainment’ (IE). Our involvement goes back to 2016 when we began helping our clients access government tax support through the Video Games Tax Relief (VGTR) programme. So far, games studios have claimed over £600 million in tax relief, with Coutts supporting many of them at crucial development stages ahead of scaling and allowing them to maximise their capture when they come to market. 

That’s a critical point for many games developers. One of our clients was able to realise an income of £70 million in their first month. We’d brought them on board around three years before the game was released, provided financing which proved crucial in giving them the runway to make a successful, well marketed launch. Off the back of this, they were eventually able to achieve an exit worth hundreds of millions. The founders became private clients.

This surmises our approach. I always say we provide commercial banking like a private service. We’ve spent over 300 years working with the business ground breakers of each new generation underpinned by a culture of understanding their sectors, challenges and goals.

That will always go beyond ever simply being ‘the money’. Perhaps the element of our service I’m proudest of is how we’re a club in the way we connect clients. I want to make sure clients can network when they want to, not just when we host events but whenever we see an opportunity or when they interact with other clients through our exclusive ‘440’ app [criteria apply, available on selected devices].

Through these forums, we’re able to connect new IE projects with venture capitals, angel investors and key partners to help them evolve their business ahead of, or during, scaling. Our team have been able to make those key introductions many times, bringing clients into a unique and fertile finance ecology. In time, many of our clients then access that ecology as investors themselves, bringing their experience and well-earned windfalls to create equity in the next cutting-edge venture.

Investing in the future

Over time we’ve established a comprehensive offering for media clients in music, arts and the creative industries. Interactive entertainment will only further amplify these sectors through gaming. Today, there are over three billion gamers worldwide, and that is set to grow as new technologies such as, artificial intelligence, virtual reality, augmented reality, blockchain and web3 come online. For every business, markets and consumers are changing massively – facilitated by new technology that is often first rendered in gaming.

Like our clients, we know we’re on the threshold. I believe having the right partners on the journey will be crucial and that is exactly what I want us to be for our clients – not just a financer but a partner who can help them navigate forthcoming regulation in the UK and globally, who can connect them and share experience. We know that’s a two-way street. We can only grow if our clients grow and our own learning is a huge part of how we better serve clients, be it in our products or our intelligence. I’d say the learning is the part of the journey I enjoy the most.

We’ve helped hundreds of clients scale commercially and, along with our partner bank NatWest, we hope to help thousands more. We used the NatWest accelerator infrastructure to launch the first Coutts accelerator aimed at encouraging early-stage businesses into the sector. This was very well received and we hope to do more in the future. NatWest is also helping kids with financial education via its Island Saver game and the acquisition of Rooster Money. There is more to come from NatWest so watch this space.

The way a game such as Island Saver can help us learn and plan for the future is so exciting. It shows us the growing horizons of this industry – it’s not just about planting acorns to grow trees but forging the tools to create whole new investment landscapes.

Find out more about how our Interactive Entertainment Banking proposition could help your business:

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