The launch of a £25 million fund for the development of console and PC games called Fund4Games was yesterday announced by Noble Fund Managers Limited, the investment arm of UK-based investment bank Noble Group. The fund will be based in Edinburgh.
The announcement was made at E3, the Electronics Entertainment Expo in Los Angeles. The fund is designed to provide the financing required by entertainment software developers to accelerate growth, while reducing the need to tie up a publisher’s funds until the game has been completed and delivered.
Douglas Alexander, UK Minister for E-Commerce, who is visiting E3 to support UK companies, said:
"Some of the world's leading games developers are already found in the UK. Our developers have gained a reputation for being innovative and original. Titles developed in the UK typically dominate the global best-seller lists. This fund will enable the UK games industry to build on this success, providing exiting new and innovative games to entertain us all."
Key benefits for developers include:
- Lowering the break even threshold for games by increasing royalties;
- Improving returns on hit games; and
- Removing of financial uncertainty if the publisher fails to make advance payments.
- Advantages for the publisher include:
- Not locking up the publisher's capital resources until games are completed and delivered;
- The ability to increase the number of games under development by easing cash flow constraints; and
- The removal of the development expenditure from the publisher's balance sheet.
David Reilly, director of digital media for Scottish Enterprise, Scotland’s main economic development agency, added:
“Scotland has an enviable reputation for creativity in game development. Fund4Games is an important move that will create more opportunities for game developers in Scotland and the UK. As the first such fund in the UK it is also a further demonstration of the innovation in financial services in Scotland.”
For further information see: www.fund4games.com