Sir Ian Livingstone co-founded Games Workshop in 1975, selling board games from a flat in Shepherd’s Bush - Clara Molden for The Telegraph

The founder of Games Workshop has said Britain is becoming a “work-for-hire nation” that sells many of its most valuable ideas to overseas companies rather than nurturing them at home.

Sir Ian Livingstone, a British gaming pioneer who helped bring titles such as Tomb Raider to living rooms, said it was “difficult in this country to scale companies to become global competitors”.

“We are wonderful at creating intellectual property,” Sir Ian said. “[We have to move] further up the value chain, of IP [intellectual property], of more revenue taxed in this country rather than being sent overseas to foreign owners and we end up being a work for hire nation.”

Sir Ian was talking specifically about the video game industry but his comments could equally apply to technology more broadly. A string of British tech companies have been taken over by foreign businesses in recent years, including Darktrace, Arm and Graphcore. The deals have fuelled concerns that British companies lack the financial support needed to stay independent.Sir Ian Livingstone helped bring titles such as Tomb Raider to living rooms

There are separate concerns that government policy around artificial intelligence (AI) will favour foreign tech companies at the expense of British creative industries. Intellectual property laws are being rewritten to allow AI companies to hoover up data from artists and writers as part of the Government’s attempt to drive growth. However, authors, musicians and Labour’s own union backers have warned that the changes will make tech companies in Silicon Valley rich while hollowing out Britain’s creative industries.

Sir Ian has been dubbed the “first knight of the nerds” after becoming the first person in Britain to be knighted for service to video games in 2022.

He was chairman of Playdemic, the maker of the popular smartphone game Golf Clash, which was sold to Warner Bros. for $7.2m (£5.6m) in 2016, five years before Electronic Arts paid $1.4bn for the company.

He also chaired Sumo Group, a gaming group that helped to develop the popular game Hitman, before it was sold to China’s Tencent in 2021. Gaming companies including Codemasters, Mediatonic and Jagex have also been sold in recent years. Grand Theft Auto, the world’s most successful video game, was developed by Scotland’s DMA Design before it was sold to New York’s Take Two in the late 1990s.

Sir Ian, who is now a founding partner at investment firm Hiro Capital, said: “I often say to ministers, ‘What’s the common denominator between Grand Theft Auto, Tomb Raider, Football Manager, Golf Clash and Fall Guys?’ They say, ‘Well, they’re all created in the UK.’ And I say, ‘Yes, they were – but they’re all foreign owned.’

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“We’re so good at making games. And yet we end up selling our companies quite soon.”Grand Theft Auto, the world’s most successful video game, was developed by Scotland’s DMA Design - Rockstar Games/AP photo

Successive governments have tried to keep home-grown tech businesses in Britain for longer. David Cameron announced plans to turn east London into a “tech city” in 2010. Jeremy Hunt, the former chancellor, vowed to make Cambridge Europe’s answer to Silicon Valley in 2023. Rachel Reeves, the current Chancellor, repeated the ambition in January.

However, video games still struggled for recognition despite industry figures suggesting the sector supports 73,000 jobs and billions in economic value.

Sir Ian said: “Video games has always had a tougher profile. It used to be seen as a domain of young boys in particular, locked away in their bedrooms doing something that their parents never did.

“Clearly you cannot ignore the size of the industry. But as a profession, it’s always been seen as a bit weird, I think, because people will see that games are for children, and therefore it can’t ever be a proper job.”

Last month, the gaming lobby group Ukie warned that the UK was becoming an “incubator economy” due to a lack of financing, meaning ideas are developed here but cannot grow and must seek funding overseas. Ukie has called for more tax relief for smaller developers to support the sector.

Sir Ian called for more public support from ministers. He said: “Whenever you see a senior minister in a photo opportunity, it’s usually wearing a hard hat and a high-vis jacket outside some wood chip factory that’s probably failing. You never see them inside a game studio.”

He pointed out that Sir Demis Hassabis, the Nobel prize winning computer scientist behind Google’s artificial intelligence lab DeepMind, got his start in video games. Sir Demis, who is British, developed the simulation game Theme Park as a 17-year-old.

As well as his work in the video game industry, Sir Ian was also a co-founder of Games Workshop, a rare example of a home-grown success story. The company invented the table top model game Warhammer, which has become a global success and helped turn Games Workshop into a £4.8bn company.Warhammer has become a global success and helped turn Games Workshop into a £4.8bn company

Sir Ian and two friends founded the company in 1975, selling board games from a flat in Shepherd’s Bush, west London, and then from a camper van. The company’s break came when an obscure fanzine published by Sir Ian found its way into the hands of Gary Gygax, the inventor of the fantasy game Dungeons and Dragons, which led to Games Workshop securing its European distribution rights. Other successes such as Warhammer followed.

Games Workshop is now a FTSE 100 company, worth more than easyJet and Burberry. In December, the company announced that it had reached a deal with Amazon to develop a series based on Warhammer 40,000, the futuristic spin-off of the fantasy series, to be produced by Superman’s Henry Cavill.

Sir Ian sold his shares in Games Workshop as part of a £10m management buyout in 1991 and went on to run the video games developer Eidos, which developed the Tomb Raider games and the hugely successful Championship Manager series.

Given his view on British companies selling out too soon, does he now regret selling his Games Workshop stake when he did? “No, you should never look back,” he said. “We look on as proud parents.”

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