How are UK-based game developers responding to Brexit? (update)

The people of the United Kingdom voted to exit the European Union last night, a controversial, unexpected result that is expected to have serious economic and cultural ramifications. Some of these have already gone into effect: The British pound has fallen to its lowest value since 1985 as the global market heads toward an uncertain future.

The full effect of the U.K. pulling out of the EU won't be immediately apparent, as the departure process will take years to finalize. Yet critics have already voiced concerns about the weight it will carry on citizens, businesses and the immigrants whose current residence in the country a number of pro-"Brexit" supporters cited as a major reason for their vote. These include members of the British gaming industry, many of whom Polygon reached out to for their thoughts on Britain's pending independence.

"This is complicated news and I think it depends on where you are in the value chain," said Phil Harrison, an investor in the game industry as well as a former corporate vice president at Microsoft and president of Sony Computer Entertainment Worldwide Studios.

"For gamers, I don't think it will make a big difference," he added. "There might be a change in game pricing once tariffs are resolved but I find that unlikely."

"We are shocked and disappointed"

But Harrison told Polygon that there could be a greater effect on studios, particularly when it comes to recruiting diverse staff. When the U.K. leaves the EU, it's expected that things will get a lot harder for foreign-born residents or those looking to move to the country. Currently, citizens of the Union's member states can reside in any country with relative ease. That will no longer be true when the British make their exit.

"We've always had a melting pot of talent," Harrison said of the British games industry. "When I've run studios and placed ads we've had applicants from all over Europe and that sort of diversity makes for a more dynamic culture and more exciting and better games."

That could get trickier with increased immigration restrictions. Investment from other European states in the British industry could also become tougher when the country secedes.

Michael Pachter, a research analyst at Wedbush Securities, also shared his thoughts with us on how Brexit could play out for the local games industry. Like Harrison, he mentioned the possible challenge of bringing in outside design talent to work on games in the U.K.

"Obviously, developers' access to EU talent will be somewhat constrained, but they are now a lower cost place to do business, so it's possible we will see publishers move more development there," Pachter said.

He added that "sales in the U.K. will be less profitable because of currency translation, and it's not clear if the console manufacturers or publishers have a lot of pricing power to offset lower profits from translating into their home currencies at lower rates. If they can't raise price, the U.K. market will be less profitable than other markets."

"We are entering a period of uncertainty"

Other British-based games companies spoke about the poll results more generally, with some expressing dismay.

"As you can probably imagine, we've been talking about the EU referendum results a lot today," a representative for Chucklefish, publisher of Stardew Valley, told Polygon. "We are shocked and disappointed, as we believe that being a part of the EU is beneficial to the games industry as well as the country as a whole."

Chucklefish expressed uncertainty about the economic effects on its business, but the studio plans to remain in England for the foreseeable future. "It's unlikely Chucklefish will abandon its home in London," we were told. "We still like it here!"

Team17, which publishes the Worms games, along with the upcoming Yooka-Laylee and Way to the Woods, issued a more impartial statement, below:

We are entering a period of uncertainty but the UK People voted and this has to be respected. Team17 are committed to continuing to develop our sustainable business with all of our partners around the world. On a more local level, our hope is that all progress the industry has made thanks to the efforts of both TIGA and UKIE will remain in place (access to finance and favourable tax environment amongst many other things). As a creative industry, we rely on talented people, and talented people are spread around the world so we need to make sure we can continue to ensure our industry flourishes despite today's referendum results

TIGA and UKIE are British-based nonprofit trade associations dedicated to the interests of local game developers. Jo Twist, UKIE's CEO, posted similar thoughts on the group's website and mentioned issues set to arise from the results of the vote, echoing Harrison's concerns about access to international developers and funding.

"Ukie is committed to ensuring the UK is the best place in the world to make and sell games," Twist wrote, "and although this decision and the political uncertainty it brings will have an impact on our businesses it is important to remember that we are already a globally successful sector and a leading exporter in the digital economy."

The economy is just one reason why "Brexit" is riling people up

While a possible recession or other economic uncertainty is a major part of why many are concerned about the decision to leave the European Union, the motivations that led to the result is one that many have spoken out against. It's a decision that, to many experts, reflects a growing resistance against immigrants, as explained by our sister site Vox in one of several pieces on Brexit.

Media Molecule (LittleBigPlanet, Tearaway) alluded to this sentiment that encouraged some Brits to vote for the exit in a tweet.

Today we're having a BBQ to celebrate the amazing diversity of the Media Molecule Team and all their families. ❤️ pic.twitter.com/4Dz2QXPXo4

— Media Molecule (@mediamolecule) June 24, 2016

The Chinese Room of Everybody's Gone to the Rapture fame spoke out more bluntly about the vote on its Twitter account.

It's a strange/tough day for many of us, but be good to each other, you hear?

— The Chinese Room (@ChineseRoom) June 24, 2016

Mike Bithell, developer of Volume, voiced some of his frustrations with the vote on social media.

Heartbroken. Taking some time away to work on my optimistic videogame.

— Mike Bithell (@mikeBithell) June 24, 2016

Several other U.K.-based companies told Polygon that they would not be speaking about the election results, however. Electronic Arts, for example, has offices sprinkled throughout the U.K., including a large hub near London and a studio in Manchester. A company spokesperson told Polygon that EA has no comment to make, but is "watching the developments closely."

Polygon also contacted various major games companies with significant U.K. offices, seeking comment, including Sony, Activision and Ubisoft. We'll update this story if we hear back from any of them.

Colin Campbell contributed to this report.

Update: Stuart Dinsey, chairman of Curve Digital Entertainment and author of a book on the British games industry, shared his take on the poll results with Polygon.

"Nothing has changed overnight and indeed nobody yet knows what those changes might be, how long they might take or if there will be any at all that are of significance to the sector," he told us.

Despite supporting the move to remain part of the European Union, Dinsey sounded optimistic.

"The UK games business is also extremely lucky to have such a strong trade association in UKIE, which will work closely with Government to ensure that we have the best possible business environment going forward," he said. "The UK games industry is a powerful, successful, exporting sector and will remain so."

Update #2: Just Add Water CEO Stewart Gilray told Polygon that, on a personal level, the final decision for the U.K. to leave "shocked" him.

"As a nation what's done is done," he said, "no amount of complaining will revert the vote, so we have to just suck it up and get on with it, and make whatever the future is our own."