D5.1 - Report on Policy Review

The policy review has set out to explore the current video game industry cluster policy landscape to provide a foundation for new policy recommendations originating from forthcoming tasks in the GAME-ER project. To this end, CUNI collected 42 documents authored or commissioned by key stakeholders in the area of video game industry policy, including the European Commission (and its initiatives and projects such as the European Cluster Collaboration Platform), the European Game Developers Federation, or the United Nations’ World Intellectual Property Organization.

Out of the total 42 documents, 31 contained relevant information regarding video game industry clusters and policy recommendations. It was further analyzed this subset of relevant documents using the analytical grid developed in a T3.1 (D3.1 - Analysis grid and interview script) of the GAME-ER project. Additionally, inductive qualitative analysis was also used in order to identify concrete policy recommendations.The analysis identified several key issues and challenges facing the cultural and creative sectors, particularly the video game industry:

• Difficult access to EU funding and support, including programs like Creative Europe, which are technically open for video game development projects.
• Brain drain of talent to countries offering more generous incentives (in the past this was, for example, the case of France versus Canada) as well as unhealthy intra-EU competition due to differences in public funding support among member states.
• Industry fragmentation limits collaboration, but at the same time video game industry consolidation and platformization is threating to relegate European video game companies to the role of service providers by extracting profits elsewhere in the global network of the video game industry, mainly to the U.S., China and Japan.
• Broader challenges such as the need to better integrate cultural initiatives into sustainable business models, address global competition and market access issues, remote work and cross-border operations, or promote environmental sustainability.
• Specific challenges such as the lack of a clear NACE classification for the video game industry, complex digital rights management, high risk and difficulty in raising finance for video game development, limited access to production and business skills, a disadvantageous position of video game developers with regard to industry convergence, and negative perceptions of the video game industry

The existing policy recommendations cover many areas (funding, regulation, cluster leadership, education, or data), but sometimes suggest conflicting advice:

• Simplifying funding application processes, improving access to venture capital, and developing dedicated national strategies to support the video game industry's growth and competitiveness.
• Promoting the value of arts, culture, and creativity for the European economy and society. This can also help the related goal of supporting inter-clustering and cross-sectoral networking as a way to limit potential adverse side-effects of policy interventions. At the same time, industry trade organizations call for industry specific support and regulation.
• Be open to industry consolidation to achieve scalability, resource optimization and market expansion. However, at the same time European institutions warn about the role of digital platforms and recommend regulations to protect European video game companies.
• Encourage collaboration of various institutions, businesses, and public authorities as a way to balance out the agendas of these stakeholders and institute effective leadership within clusters.
• Invest in education of future talent and as a way of attracting foreign talent to the cluster locations.
• Improve monitoring, including the aforementioned NACE classification, to better inform business as well as public authorities about effective business models and impacts of policy interventions.

The analysis also found out that policy reports position video game industry clusters as a viable solution for some of the mentioned challenges, in turn, calling for additional institutional cluster support. Cluster policies are, however, deeply embedded in pan-European and national policies and require careful consideration of the interlinked networks of video game production within the global context.