Home Business Insights & Advice The essential guide to setting up a digital gaming business

The essential guide to setting up a digital gaming business

by Sarah Dunsby
13th May 24 5:46 pm

Here in 2024, the digital entertainment industries continue to surge in popularity across the globe and gaming is proving to be one of the most lucrative and rapidly-developing markets for new entrants. The UK is a significant player in the market, and with new technological advancements creating even more opportunities for growth in the near future, now could be the ideal time to enter the market.

Whether you’re an experienced business owner or a new entrepreneur taking your steps into your first venture, this guide will provide a comprehensive overview of starting up a digital gaming business in the UK, covering various types of businesses, legal considerations and how to develop a successful gaming brand.

Why enter the gaming industry?

For several years now, the gaming industry has undergone extensive growth and development, to the point where it is now one of the world’s top entertainment industries and pulls in global revenues of over US$180 billion. According to Statista, the gaming market in the UK alone was worth £12.1 billion in 2023, generated by an audience of 37.7 million gamers. Moreover, online sales accounted for over 97% of all video game sales in the country in 2023, indicating just how strong the digital gaming market is

Types of digital gaming businesses

Now that you’ve got a better idea of why now is a good time to launch a gaming business, let’s take a closer look at the type of digital gaming businesses it’s possible to set up.

Games marketplace

Gaming marketplaces follow the eCommerce model in providing users with a platform to buy, sell and trade digital games. As the name suggests, it can serve as a marketplace for players to exchange gaming related products and services, and can even extend to the distribution of virtual currencies and in-game items.

In terms of legislation, operating a gaming marketplace in the UK typically doesn’t require specific licences. However, compliance with consumer protection laws, GDPR data protection regulations, as well as intellectual property rights, will be essential.

Online casinos and iGaming platforms 

Online casinos and iGaming platforms offer various real money games and activities, such as slots, poker, roulette and blackjack, as well as sports betting. Players can participate in games by placing bets and winning prizes using fiat and decentralised currencies. One of the latest trends in iGaming is social casino gaming, in which players compete for play money and virtual rewards, like points or chips.

Due to the fact that iGaming involves using real money, anyone setting up a digital platform needs to obtain a gaming licence and comply with the stringent regulations of the local regulator, the UKGC. As well as being properly licensed, there’s a requirement for iGaming sites to use the latest cryptographic protocols when processing player data, while casino and gaming platforms need to integrate Random Number Generators (RNGs), which are software algorithms that ensure games like online slots are not only fully operational but are provably fair. Player protection is paramount in this sector, and there are also additional licensing and regulatory requirements to meet for operators who expand into international territories.

Game Streaming Service

As demonstrated by the likes of YouTube and Twitch, there’s a growing appetite among the latest generation of gamers for gaming-related content. A game streaming service meets the social interaction needs of the gaming community by allowing users to record, upload and watch live gameplay, pro tournaments and a wealth of other gamer-generated content. Users typically interact with streamers through live chats and support them with donations and subscriptions.

As with a games marketplace, currently, there are no specific licences that you would need to set up and operate a game streaming service. But compliance with copyright laws, licensing agreements with game developers and publishers, and transparency with monetisation models are standard.

Developing a successful gaming business

/ Avalon

The UK digital gaming market presents numerous opportunities for entrepreneurs, but it also comes with several barriers to entry that can pose challenges for new entrants. Regulatory hurdles, technical challenges and highly competitive marketplaces are par for the course in this burgeoning industry, which is why it’s essential to carry out thorough research before entering the pre-start up phase.

While the barriers to entry in most gaming markets remain relevant and real, it is possible to build a successful gaming brand with long-term potential. As with any business, gaming or not, developing a successful company requires a strategic approach, which considers the various factors you’ll need  to engage target audiences and stand out in a competitive market.

Key elements to focus on include:

  1. Know your audience – conduct in-depth market research to understand the preferences and behaviours of your target demographic. Fully understanding your audience will enable you to tailor your branding message, content and customer experiences to engage them in the most effective ways. Consider things like the existing gaming habits of your ideal customer, the types of platforms they use, preferred genres and their motivations for playing.
  2. Nail your USP (Unique Selling Proposition) – ensure your company stands out by offering solutions that are unique and effective at meeting the needs of your target audience. Whether you differentiate your company by providing innovative gameplay mechanics, for example, or a distinctive art style in your output, your USP should resonate with your target audience and create a memorable brand identity and association.
  3. Deliver high quality experiences – quality is paramount and should be prioritised in everything you do, from the gaming software providers you partner with to the customer support offered on your platform. For example, if you’re planning to launch a gaming service, whether as an iGaming platform or decentralised Web3 game, delivering the highest quality user experiences to your end customers is a core tenet of successful brand development.

 

Please play responsibly. For more information and advice visit https://www.begambleaware.org

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