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Video games are selling well despite the recession, but is the government taking this thriving indus

The recession has hit the creative industries, for years an important element of New Labour's vision for a post-industrial economy, and hit hard. Its effect on established areas such as television and print media has been particularly brutal. Yet video games have quietly gone from strength
to strength. Last year, worldwide retail sales of games rose to $32bn (overtaking those of DVD and Blu-ray), with many of the most exciting titles coming out of UK studios.

Grand Theft Auto IV, developed by the Edinburgh-based Rockstar North and released last year, has a filmic level of involvement with its gangster characters and plot. The dizzyingly pretty futuristic racer Wipeout comes from SCE Studio Liverpool. And down in Guildford, Media Molecule has created LittleBigPlanet - an endearingly crafty-looking game that opens up development tools to players, allowing them to build their own levels. But some figures in the industry fear that a combination of limited government support and diluted educational standards will deprive Britain of the talent on which video games depend.

“Things have been left to slide," says David Braben from Frontier, developer of the RollerCoaster Tycoon series. "And that is concerning for many reasons. You never know, we might have a different government in a year's time." Does he think a different party in power would be more receptive? "Oh, yes. Couldn't be less!"

In Canada, a system of tax breaks for games developers has helped to establish a successful industry. Braben estimates that, for a cost of half a billion pounds, the Canadian government has secured three times as much in inward investment. As long as similar breaks remain unavailable in the UK, he argues, the domestic industry will fall behind its international competitors, and the most successful and talented studios and individuals will be drawn overseas.

Meanwhile, Braben worries that changes to the university system intended to expand access have led to a proliferation of high-volume, low-quality games degrees - he describes it as a "bums on seats" attitude. His concerns are supported by figures from Skillset, the sector skills council for creative media, which found that only 31 per cent of students on specialist games courses went on to employment within the games industry. "A number of courses have come up with 'computer games' in the title, and fundamentally that was done without consultation of our industry, teaching completely the wrong things, because [the subject] was perceived as easy to teach. The tragedy there is, if our industry doesn't take them, no other industry is likely to, either," says Braben.

One of the problems for the games industry in making its case has been the persistently negative attitude towards its work at different levels of government. When Change4Life (a health campaign aimed at families in England) was launched, one of the images chosen to illustrate bad habits was of a wall-eyed child, slumped with a games controller in hand. The sector has been treated with suspicion and alarm by vocalparliamentarians, including Keith Vaz (who has promulgated an unproven link between violent video games and violent behaviour) and Baroness Greenfield, whose tenuous thesis of a link between games and impulsive behaviour seems to be indulged weekly.

“There is a generation of people who have not had much contact with games, and I do find it very frustrating when people I would put within that group are making bold statements about games without the knowledge or justification for what they're saying," says Braben, who compares the eruptions of outrage at explicit games to the video nasty scares of the 1980s. "Clearly, any art form - because that is what I think we have - can be used in a way that some people don't approve of. Less than 3 per cent of games carry an 18 rating. If you looked at comments by MPs, you'd swear it was 98 per cent."

Ed Vaizey, the shadow minister for culture, agrees that the industry has reason to be disillusioned, and says that a Conservative government would be active in reforming education. "It must be an idea worth exploring. What's killing our games industry here is the competition from Canada. The government wasted a huge amount of time claiming they were going to take Canada to the World Trade Organisation, which was
always bogus. So I think the games industry's quite right to think the government doesn't take it seriously." He points to the Tories' recruitment of Ian Livingstone (creative director of Eidos) to their own review of the creative industries as evidence of the party's commitment to support the UK games industry's position as the world leader in creative content.

A spokesman for the Department for Culture, Media and Sport defended its record on games, highlighting £4.25m in grants to the industry, the availability of research and development tax credits and the Action for Business programme. "The games industry is an important and dynamic one, and we want to see the UK maintain a talented production base," says the DCMS.

Jamie Sefton of Game Republic, part of the regional media agency Screen Yorkshire, emphasises the importance of the games industry to our economy. "This time last year, the number-one bringer of money to the Treasury was the financial district. We all know what's happened since then. The second-biggest provider of funds to the Treasury is the creative industries."

Happily for gamers, there is now a cross-party committee to represent their interests in parliament. Its members include David Puttnam,
John Whittingdale and Tom Watson. "I think the government and all politicians are waking up to the fact that there's money in them there games, and there's an industry here which is worth supporting," says Sefton.

The industry will be waiting to learn whether the revelation has come in time to preserve and promote this emerging sector.

Sarah Ditum is a production editor based in Bath

Sarah Ditum is a journalist who writes regularly for the Guardian, New Statesman and others. Her website is here.

This article first appeared in the 31 August 2009 issue of the New Statesman, The next 100 years