EXCLUSIVE: “Game On!” – Elaine Dowman, Barclays in ‘The Fintech Magazine’

Elaine Dowman explains why Barclays is banking on the UK’s video game industry

It’s bigger than the film, TV, and music industries combined. Globally, it’s projected to be worth more than $200billion by the end of this year. And right now, more than three billion people worldwide could be doing it. What is it? Gaming. The creativity of developers in the UK has put the country at the top of the industry’s leader board in Europe, generating £7.1billion in revenue and reaching up to a fifth of the UK’s adult online population. It’s been a GGWP (good game, well played) in gamers’ parlance. No wonder Barclays Bank wants to be a part of it.

“Barclays has been involved in the creative industries since the 80s [but with] a growing focus on the games space in the last four years,” says Elaine Dowman, the bank’s head of games and creative industries, who’s a gamer herself.

“After a really long day of work, I often sit down and play… kind of relax and unwind, and escape to a different world,” she says. Almost 3,000 games-related businesses in the UK are involved in creating that alternative reality. A growing number of them are small, independent developers who often struggle to get the investment they need.“It makes sense for a bank to support the growth of these UK businesses,” says Dowman. “Developers need to understand finance, because they’ll be pumping a lot of money into a game quite early on. Designing a game could take anywhere between two and seven years. It’s hard to show a prototype because a lot can change over that time, so it can be a challenge to get funding in the early stages.

“We can help from a banking perspective, but we also have specialist products, like a Video Games Tax Credit Loan, which allows businesses to borrow against HMRC’s Video Games Tax Relief.” Dowman’s team does a lot to expose those games businesses, she says.

“We’ll run demo days, invite contacts and investors to see what these businesses are doing and allow them to talk about their games. We also work with the UK Interactive and Entertainment (UKIE) trade association. They promote the UK games industry globally, and their line is that the UK is the best place in the world to make games.”

The bank is currently running a six-month mobile gaming scaleup programme with UKIE, tapping into one of the fastest growing segments.

“There are lots of games scaleup programmes out there but very few that focus on the nuances of mobile,” explains Dowman.

In fact, according to Statista, mobile games, with various monetisation strategies and the much larger user base that smartphones provide, will make up a whopping 85 per cent of global video games revenue in 2023. As a global bank, Barclays works with the industry from corporate to grassroots level and has a well-developed relationship with larger publishers who can support smaller studios. In fact, increasingly, large publishers are working with and acquiring independent studios that will come under their brand, but still operate independently.

“They also need support financially, and may need funding or exposure,” says Dowman.

“A lot of industries look to gaming for innovation, particularly in the micropayments space”

THE EAGLE LABS

Possibly the bank’s most important offering for aspiring games companies is its Eagle Labs programme, which recently won the UK government’s Department for Digital, Culture, Media and Sport, Digital Growth Grant to accelerate tech startup and scaleup ecosystems across all the regions and nations of the UK. Eagle Labs will be responsible for supporting the UK tech sector as a whole from April 2023 to at least March 2025 taking on the role previously held by the not-for-profit Tech Nation, which had helped to bring more than 5,000 startups to the market since 2011, including UK fintechs Monzo and Revolut. It will close its operations this month.

David Hamilton, Barclays head of implementation, was keen to counter criticism of the government’s decision to choose the startup incubator division of a FTSE 100 bank to receive taxpayer funding, saying Barclays had been ‘getting our hands dirty’, supporting startups and scaleups for the last seven years.

“We’re not late to the party,” he said.

Indeed, the bank’s Eagle Labs UK network has grown to 38 physical sites since its inception in 2015 covering the whole of the UK. Six of those Eagle Labs are games-based. That’s good news for smaller developers, who can access the site’s developer suites, kits, and specialist computers.

“In some of the studios, we even have motion capture equipment,” adds Dowman. As any developer will be painfully aware, hiring this kind of equipment and studio time can be prohibitively expensive. “We can give them the equipment to use, and test things with, before they invest more money into it,“ says Dowman.

Games businesses can find support across the entire Eagle Labs network but the specialist equipment and knowledge at those six labs could be invaluable to a startup.

“We’ve tried to locate them around games hubs and make them as accessible as possible. We have labs in Belfast, Glasgow, Sheffield, Liverpool, Southampton, and Brighton, which is a well-known games hub,” says Dowman. “We hold a lot of events in those spaces, and build a regional community around them for developers, because it can be quite a lonely thing to be. A lot of developers are starting their businesses in their bedrooms, on their own. They know everything about games, but nothing about having an accountant or a lawyer, for example. Eagle Labs can provide those introductions.

AN INDUSTRY FOR THE NEXT GENERATION

Creating these kinds of connections is particularly useful as crossovers with other industries are becoming more apparent. One in particular – with paytech – highlights the role games can play in seeding innovation, says Dowman.

“A lot of industries look to gaming for innovation, particularly in the micropayments space. You just have to look to the streaming world and esports. And, because it’s a global industry, there’s a need for foreign exchange… I’d say games are leading in that space.

“The growing esports sector is dominated by younger gamers and, as such, there is also potential for the bank to play a role in financial literacy. “You have young people who are esports players, content creators, YouTubers, or streamers on Twitch, who make quite a lot of money,” says Dowman. “There’s a lot of focus on esports players particularly and their mental health, physical fitness, and their diet. But what about financial literacy? We’ve done a lot of work in the past with Premier League footballers and we’re now transferring that experience to the games space.“

ADAPTING TO GLOBAL CRISIS

If gaming wasn’t on investors’ radar before the pandemic, they couldn’t fail to miss it afterwards. Who hadn’t heard of Nintendo’s island simulation game Animal Crossing: New Horizons by the end of 2020? Launched in March of that year it sold 13.4 million units in its first six weeks. Another 2020 success story was PC multiplayer title Fall Guys: Ultimate Knockout, which generated 11 million unit sales in four months.

“They were a form of entertainment that you could play with families at home, but also bring people together internationally, to play games, talk, and share,” says Dowman.

“There are incredible stories, about grandmothers and grandfathers learning, so they could play with their children on the other side of the world to still be able to connect with them.”Within the first few months of the pandemic, lockdowns drove a double-digit increase in the time spent on gaming across the world – in Latin America, screen time went up by an astonishing 52 per cent, according to Statista. As a result, worldwide digital gaming spending on in-game content and paid downloads increased by 12 per cent and 21 per cent respectively. It was relatively easy for the industry to scale to demand.

“When the pandemic hit, a lot of businesses, traditional businesses, took a while to adapt to hybrid working, whereas the games industry actually did a lot of that already, and could change very, very quickly,” says Dowman.

That drove a frenzy of history-making acquisitions over the next two years. Currently, the biggest all-time sale – of Call of Duty maker Activision to Microsoft’s Xbox for $69billion – is sitting in the regulator’s inbox. For lone developers busily making their digital fantasies a business reality and looking on that megadeal with envy, Barclays’ message is clear: it’s game-on with us.

This article was published in The Fintech Magazine Issue 27, Page 64-65