 Rhaen i chi i gail, dweudio, the first meeting in 2015 of the economy, energy and tourism committee. Can I welcome all the members? Welcome our witnesses and welcome those joining us in the public gallery. I remind everyone please to turn off or at least turn to silent all mobile phones and other electrical devices so that they do not interfere with the sound equipment. We have apologies this morning from Chick Brody and from Joan McAlpine, Even though Joan, I hope that she might be able to join us a bit later. Of it we are joined my Bruce Crawford is here as a substitute member. Welcome. We do have a change in committee members so I would like to first of all pay tribute to those who have left us, both Richard Baker and Margaret Madugo, as members of this committee, for quite some time. I would like to thank them for their contribution to the work of the committee and wish them success in their new berths in the parliament. I'd like to welcome two new members, Joan Lamont and Lewis MacDonald. Thank you for joining us this morning. Item 1 on the agenda is a declaration of interests, firstly from our new members and then from our substitute members. If I could invite, first of all, Joan Lamont to indicate if she has any relevant interests that she wishes to declare. I don't have any, thanks. Item 2 on the agenda are the committee agreed that we will take item 4 in private. Item 3 on the agenda, we are taking evidence in relation to our inquiry on the economic impact of the creative industries. Can I just put on record our thanks to the committee to those who attended the event that we held last Wednesday evening? I know a number of committee members were there and I thought it was a very useful opportunity for us to learn from people in the sector some of the challenges and issues that we're facing them as well as being a very enjoyable opportunity to explore and experience some of the products on offer. There are a whole range of themes that came from that, some of which we can explore in the session this morning around the diversity of the sector and the levels of support that some of the challenges that are being faced. Some of that is brought out in terms of the recent submissions that we've had as a committee. I'd like to welcome our panel this morning. If I could just introduce briefly starting on my left-hand side, we have Paul Durant, who is director of business development at Abertau University, Brian Baglow, director of the Scottish Games Network, Colin MacDonald, who is the Games Commissioner for Channel 4 and Chris Van Der Kyle, chairman of 4J Studios. Welcome to you all and thank you for coming along. We have about 90 minutes for this session. What I intend to do is, given that we have quite a range of written submissions, is not ask you to make opening statements, but I'm sure that we can pick up the points that you're keen to get across in terms of the questions that are going to be asked. Because there are four of you, what I'm going to do is ask members if they would when they're asking questions, rather than just throw them open, in which case you'll all feel that you want to have a say. Perhaps I'll ask members if they would specifically direct their questions initially at one member of the panel, and then if you want to come in and contribute to that discussion, if you just catch my eye, I will bring you in as best as I can, and if I can exhort members to keep their questions as short and to the point as possible and answer similarly as short and to the point that's possible, that would be very helpful in terms of getting through what is quite a broad range of topics that we want to cover in the time that's available to us. I wonder if I could start off by picking up an issue that is covered in a number of written submissions. It's covered in the submission from Brian, about a lack of national strategy or vision for the sector. There is this because it is reflected in quite a lot of the evidence that we've had. The submission from Colin Anderson, who is the managing director of Denkey, who sets out in his written submission his view that the primary issue affecting the digital media sector at the moment is the lack of a commonly held vision and clearly defined long-term strategy that all government agencies, departments, investors, businesses, et cetera, can use as the basis for aligning their endeavours. He goes on to expand on this and why he thinks that there's a need for a national digital network for Scotland. I wonder if I could maybe start off with yourself, Brian, asking you whether you agree with that. I think that you do because it's in your submission, too. Explain why you think that this is the case and what needs to be done to try to address it. I'll bring the others in to see if they want to comment. Good morning, everyone. I echo the chairmen's thanks for your participation at last week's showcase. It was fantastic. All the games companies were incredibly happy that we saw so many members there. The lack of strategy in the digital sector is a very widespread phenomenon, not just in Scotland but across the UK. It is an incredibly rapidly evolving industry and one in which new devices, new gadgets, new routes to market, new business models appear all the time. That forces the industry to constantly change and constantly run to keep up. As such, the support that is on offer is sometimes out of date by the time that it is implemented. Without any kind of long-term strategy or any real vision about pulling all of the creative industries together using digital media and interactive technology, we can only ever hope to be reactive and we certainly can't go out and plan our future in a really effective way. Let's be honest, interactive media is a transformative technology, as well as a type of content. It is radically affecting all the industries that you are going to be talking to film, television, music, literature and the wider issues in sectors such as healthcare, education, even politics, sports and fitness. All those things are being affected by digital media. The game sector has the creativity and the technical prowess to really drive all those things forward, but it is still treated as very much a silo and an insular kind of content in its own right, rather than the transformative technology that it could be. Okay, thank you. I am keen to get all the panelists to comment briefly on this. Maybe Paul, you want to go next? Yeah, thanks. I think that for me strategies are important and certainly in terms of membership of the industry leadership group, most closely associated with this sector, there is work on going to try and further develop and refresh a strategy that has been articulated in the past. That is all important, but one of the themes that I will return to a number of times is that creating the right ecosystem for everything to happen that needs to happen in terms of economic development in the game sector is more important and strategies alone cannot make that happen. There is a lot of serendipity and it is almost like making your own luck. Some of the things that we need to do need to make our own luck essentially in this. There are fantastic opportunities for the agencies that support them and those that you might think need to be connected into strategies and visions. Most of that has too much of a lag to have a real impact in what is a fast moving sector. I will not dwell on it now, but suffice to say that for me it is much more about making the right ecosystem and that happens with a lot of small things rather than a shiny strategy. I think that your point about serendipity is interesting because one of the things that struck me and some colleagues after the event last Wednesday was how diverse the sector is, how much is going on and how many companies there are. It really is hit and miss in many cases whether a very good product ends up being successful, whether it is spotted or not and whether it gets the right level of marketing and attention. Colin Smyth. Thank you. I do think that there could be more joining up of strategy across the different agencies and across the sector. I do think that Colin Anderson's idea of a national digital network is interesting. I think that it would help. I think that my fear comes from what is achievable, that I am conscious that this is a very fast moving industry. Anything that we put in place today is going to be out of date next year or within a couple of years, worst case. I would be keen to focus on things that will adapt to the changing nature of things, albeit driven by a strategy, but not one that takes two years to put in place and is out of date within a year and a half. Thank you. It is quite interesting, because, as the committee takes evidence from various creative industries, most of the messages that you will hear are messages of challenge within a sector of requirement for funding to in some way be competitive. The game sector does not need that. We sit today with, as of last weekend, Sony's PlayStation Charts. The top two games are both developed in Scotland, one being My Own Studios' Minecraft, which we develop all the console versions for here in Dundee and East Linton, and Rockstar's Grand Theft Auto 5. I am sure that it will not have missed you that Rockstar are your new neighbours. I have taken over the X Scotsman headquarters behind you, and there will be somewhere in the region of 1,000 developers in there that will be the biggest single development studio of Scotland has ever seen and I think the biggest one in the UK by a long way. At that end, these businesses are incredibly successful and are really restricted only in their current and future success by access to talent. Actually, that is the common thread that pervades every part of the industry. In terms of things like the current fiscal regimes, both from a UK fiscal regime and support from the Scottish Government, in terms of interventions around a number of grants and things, there is a pretty good infrastructure there that is accessible. I think that with strategy that comes into this is some level of coherence and understanding across the agencies but also across those that are trying to access it could definitely be helpful in terms of information signposting. The real issue, and I am sure that it is one that we will get on to in far more detail, is the strategy around talent. That is both creation of indigenous talent but also attraction and retention of non-indigenous and, in many cases, international talent. That, to me, is the single issue that we really need to think of in the most broad sense possible. Okay, thanks for that. It is on our agenda this morning to talk about skills, education and provision of talent. Before we leave the issue of a strategy, I want to briefly get a response from you on a follow-up question, which is this. If there is going to be a strategy, who puts that in place? Who drives it? Chris? I think that that has to be a reasonably broad conversation but it has to be owned by the industry. Where we have had success in the past, we had a phenomenal engagement with Scottish Enterprise that began in the mid 1990s where they supported the real establishment of Scotland as a brand in the games industry. That was driven by the industry going to Scottish Enterprise and saying, or actually Scottish Enterprise saying, we do not know what to do to help you, what could we do? We coalesced it in that case around the biggest annual trade show in the world, E3. From that day to this, we have had a real positive presence as Scotland at that trade show. That was, in no small part, a part of Scotland's success since then, but equally, the biggest investment that they did was that they got the industry in a room. Actually, I think that it started off at a dinner, an informal dinner at Dunblane Hydro, where we managed to get together in the centre of Scotland and discuss the issues that we are facing and come to some common ground. Bringing the industry together, it is much, much bigger today than it was 15 or even 20 years ago, but even so, it is still small enough that we can get the key players in a room and the supporting agencies to try and come up with some coherent view of how we develop a strategy. Brian? It has to be industry driven. The public sector bodies, the organisations, do not have the expertise in house in many cases. Scottish Enterprise, SDI, HAIE, being exceptions, they do a lot of really good work, but the industry has to drive this forward in conjunction with the public sector, Government and Parliament. Colin Paul, do you agree with that? Generally, yes. I think that the industry needs to feel it owns it and needs to drive a lot of the agenda. I think that the only thing that I would caution is that we are still quite a young industry, we are not particularly mature, we are not great at figuring out that long-term strategy, we are not great at engaging with Government, so I think that we would need to be shepherded by someone to make sure that something came out of it that was implementable. For me, again, I would say that rather than the industry contributing to some kind of glossy strategic document or even some kind of online thing that is updated regularly, it is much more about just continued engagement with industry to build this ecosystem as a kind of a talent magnet rather than thinking about some long-term piece of work to create a strategy, because that will be out of date, but the industry is at the heart of it and is leading on it, certainly. I am going to bring in Dennis Robertson, who has questions about funding. Thank you. Good morning, gentlemen. Perhaps we should start with yourself, Paul. The submission from Professor White from Aberty, one of the things that he was highlighting was some of the start-up funding. How difficult is it to access the appropriate funding within the industry to encourage that initial entrepreneurship or maybe just to take forward the initial ideas? It can have its challenges, but talented teams with good projects will probably be able to find the funding. The rationale for potentially intervening in this sector with some kind of early-stage funding—you will see that a number of the submissions have referred to the UK prototype fund that I used to run—is more to do with contributing to that ecosystem and making sure that there is a volume of new IP being developed and making sure that there are real-world projects that can employ talent and particularly take on new graduates or encouraged graduates to be entrepreneurial in their own right to encourage people to exercise their leadership and entrepreneurial skills in real-world situations rather than learning through the classroom. You might think that that is a rather odd justification for intervening in this way, but for me, with everything that I learned for the three or four years of running that fund, the biggest impact and the biggest value came from us funding that ecosystem. To answer your question, yes, funding is a challenge, but I think that the challenge is more about providing funding so that that volume of new starts, new activities, talent and diverse talent coming together to do interesting stuff is the important thing rather than just seeing this as a bunch of potential startups that are saying they can't get investment, which is the standard story that you hear. Do you think then some type of mentoring scheme would be important? One of the things that we heard from an earlier panel was that someone might have the idea and it might be one of the best ideas there, but at the end of the day, they just can't manage the accountancy side, they can't manage the business aspect of pulling it together, so they've got the idea but they just don't have the business acumen to take it forward. Do you think that we need to look at shepherding the people through that? We absolutely do. For everything that I've said about there being a case for public intervention around that, it can only happen where there's a really robust discipline around the way that those projects are managed and overseen and connected into expertise. We're so fortunate in Scotland to have expertise, people like Chris, Colin, Dave Jones, Brian, running the Scottish Games Network. There's a huge wealth of experience for new starts to tap into. We need to perhaps formalise that and put a bit of a structure and a wrapper around it to a certain extent, because if we are going to use some public funding at any point to incentivise these kind of startups, the discipline, those mentoring schemes are very, very important. There are some good examples, as a number of submissions have referred to internationally, where there's been a kind of joined-up worth thinking. I think that Dennis DeCris is going to come in. Briefly to try to come in on that point, Dennis. One of the things is that the games industry is not overly unique in those core requirements for basic entrepreneurial skills. A lot of people come out with great talent in their sector without really knowing how to build a business. I think that we're very fortunate in Scotland between, I mean, I slightly declared interest, and the chairman of entrepreneurial Scotland also runs a saltire foundation in having organisations like that, which are all about peer mentoring, are all about bringing through people with high growth ambition into great programmes. Equally, programmes like the high growth side of Scottish Enterprise, but also the fantastic incubator culture and accelerator culture that we now have, as evidenced by, you'll be well aware of, I'm sure, entrepreneurial spark and things like TechCube here in Edinburgh. Those types of organisations of which we're looking to see more across the country are the ones that need, so they don't need to be entirely sector specific for games, they just need to be the same people that are trying to start digital media businesses and tourism will have the same challenges in terms of basic running of the businesses, those that are trying to start games companies, so we already are pretty well provided and I think continue to do so. That's interesting. Brian, you want to come in? Yeah, again, very briefly to follow up on Paul and Chrissie's points. One of the issues that we have is that we are producing more and more original new intellectual property. Last year, 2013, Scotland produced 93 games, 86 of which were original new IP. In the last year, 2014, it was around about 85, 86 of which around about 82 were original new intellectual property. It's not the creation process. Content is in some ways cheap. What we're lacking is the skills for any company, any new company to go out and operate sustainably. I'm entirely with Chrissie. The amount of help and support out there from business gateway, the chambers of commerce, through e-spark, all of the various accelerators is exceptional. What we have is a lack of business sense. People get into the games industry because they want to make games, not running a company as a by-product. It's very much the same as some of the other areas of the creative industries. It's just that in games a really small team can go out and produce something quite simply and quite cheaply, and we hey, they're a games company. We need to take that forward. It's going from the amateur, the part-time team, through to a sustainable business where we have problems. A mentoring scheme could help that tremendously. Are people aware of the potential to get support and maybe the initial financial support that's there? Are other agencies proactive promoting the support that's available? The other thing coming back to the finances, to promote some aspects, surely within the private sector, that the banks that would appear are still very reluctant to engage because it's a high risk? It is indeed a high risk. When you're looking at any creative sector that is a hit-driven industry, then getting institutional investment of any kind can be difficult and I'll defer to Chris on that as he's got the expertise in those areas. The key issue here is that we have a growing number of new teams and new companies that are forming. We now have four universities and six colleges producing game-specific graduates. The number of new companies is only going to rise because the opportunities for those graduates are now primarily entrepreneurial. We don't have the huge studios that we once did, Rockstar Aside. We're going to get more and more games companies and the smart ones will go out and find business gateway and talk to the local chamber of commerce. However, the vast majority of people coming into games tend to come from technical backgrounds or artistic backgrounds. I've only ever worked for three different people in the game sector. I would classify them as entrepreneurial, who are willing to pivot and do what, you know, change the company in order to be sustainable, in order to make money, and I think that that's what we're missing. It's that entrepreneurialism. Thank you, Brian. I think that coming on that, there is no place for the normal clearing lending banks to be investing in small start-up games companies. That would be the last thing any of us in this economy would want. It is on a high risk level. It's right at the top end of risk. However, there are others. Very recently, Tag Games in Dundee secured one of the first crowd lending loans from an Edinburgh-based organisation that was prepared to lend because run by a technology entrepreneur called Bill Dobby. He understands the sector and decided that it was worthy of risk. There is no shortage of finance. Again, I referred earlier to the fiscal policies that currently prevail in the UK. I think that the EIS scheme allows individual business angels to invest it in a very tax-efficient way into companies like this, and they do. That's there. Games tax relief for the bigger organisations is certainly starting to make a difference. As we're starting to see big inward investors look to, Brian said, we'll never see the big studios again. I don't actually think that's true. I think that we will and we are already. They're just starting in different ways. There are significant businesses of scale and it is also making sure that we don't get overly fixated on worrying too much about young companies and how they'll come through in that the ones that are going to do it will find a way. You mentioned that every company and I will probably end up mentoring in the course of a month five or six companies that will come through my door for advice into what we want to get going. I give them the same signpost that I give everyone. Of those, at least one of them will have followed up. The other four will be too busy trying to build their next prototype. Those guys—I defer to my colleague to my right calling on this—will find that if they're really talented, they'll start to find relationships with organisations like Channel 4 who are publishers who commission and help them find their way through their early stages. That's always been the traditional route. We took that route. We worked with publishers who guided us and helped us and gave us commissions, so we didn't necessarily work on our own intellectual property to start with. Then, as time went by, and we gained more experience, expertise and capital, we were able to take more risks to the stage today where we don't have any external funding from publishers or anywhere else. It's purely self-generated. Colin, you might want to comment on that. If I can come in. I have not dealt with business gateway myself, but I hear that the advice is too generic. When people get into speaking to Scottish Enterprise, they can speak to digital media experts that understand the sector and people's experience going in at a more generic level, it hasn't been great. One of the points that comes across all of this for me is the entrepreneurial thing. That's probably the single thing that I would recommend anyone to look at for the sector. We have a nation of amazingly talented creative people and technical people that create world-breaking new IP. The problem is that, as an industry and a nation, we're rubbish at exploiting it. Many of our big successes—the Grand Theft Auto—created in Dundee are still made here. Most of the money goes to the publisher in the States. Limings was created here, Minecraft, although Scotland is doing very well out of it. It's not a Scottish IP intrinsically. We need to make our companies more entrepreneurial, make them less focused about having their heads down and creating the next interesting thing and getting payroll in for next month. Never mind payroll for next month, let's think about that. How do we make millions? How do we make billions? I think that the likes of the Prototype Fund was fantastic from my point of view because it gave teams an opportunity to experiment at relatively low cost and it gave them essential skills that they could build companies out of the team that they'd gone into Prototype Fund, taken to new ventures or even just taken to other employers. Things like the Dare to be Digital Competition that Abertau also runs. It's the same thing with a bunch of students that, in the course of the summer, get real-life commercial experience and, at the end of the day, go shopping around publishers. I commission one game every year out of it and those teams learn a little about deal-making, publishing and marketing. The industry has so many opportunities and a lot of game technology can be used in other industries. There is a lot of investment available. Not all of it is as well targeted as it can be at the moment, but you need people with those entrepreneurial ambitions to want to go after it, to duck and dive and find their way around the systems. Many of our talented game creators at the moment will take it if it lands on their lap, but they are more interested in creating something amazing than figuring out business plans and how to get investment. We need to inject that entrepreneurial spirit into more of our future careers. I just want to distress that although there is this vibrant potential to secure funding for the right projects, as I said before, the idea that you have some kind of prototype funding that isn't there to address a finance gap but is there to pump prime the ecosystem and all of these talent projects is a really important one. Do you want to come in on a funding issue? Some of the issues that were raised in response to the questions on funding and finance, it's not specifically on funding and finance. I'll bring in a bit later on with that. I think that the next on my list is Johann Lamont. Thanks very much for coming along. I was interested in what you said about strategy. I think that too often we have perfect strategies, but we bear no relation to what's going on. Lots of effort to develop strategies across the board, but it doesn't relate at all to what's happening in the ground. I would have thought that it was particularly challenging where, almost inevitably, you will always be ahead of the rest of us and understanding potential. I think that it's probably more generally true of the creative industries, how you actually deal with that. I suppose that I'm interested in—there was some comment earlier about university courses and college courses. I'm interested in what links there are specifically between industry and these courses and how relevant they are. From my perspective, I'm very interested in seeing companies grow that helps the Scottish economy. However, if there's a new industry, how are we ensuring that our young people who have got talent actually have a system by which they get to it? It's not entirely by chance or by good fortune of where you happen to be. It's in the interests of you to access the talent, but it's also the interests of young people who might consider that as a career to have a route towards it. We know what the routes are for other professions and other jobs. First of all, university and college, how do you make what they offer relevant to what you need and also how do you provide a path to reach into some of our communities and get young people doing the right things so that they get those fantastic opportunities that you're describing? I think that it's a very, very relevant point of inquiry. I mean, I think that 20 years ago, Joanne, we were all getting going in the industry, you know, at 94, 95 timescale. One of the things that we realised, because a few of us, and specifically myself and David Jones and the guy who Russell Cain Dundee, were all trying to build quite big studios all on each other's doorstep, so we knew very quickly if we didn't find sources of talent to grow from, we'd all just try and steal from each other. Wages would go through the roof and would be out of business pretty quickly. We went and approached Abertau University at that point, who had an idea that they wanted to do a virtual reality and virtual environments degree. We convinced them to do something pretty radical at that point, which was not do that, which was quite generic and nonspecific, but make it about computer games. And don't be embarrassed by it. This was an industry of the future, you know, as it's become, it's the world's biggest entertainment industry. And the University of Abertau in that 15-20 year period has become the outstanding university in delivering games technology and games design and games management courses. And also building an ecosystem that goes into further education as well, you know, Dundee College specifically, but also across in the west around UWS and a number of other institutions that are doing it. You know, you sit at the table in front of you, all four of us, let's say, Paul on a full-time basis, Colin on court, myself as a visiting professor, and Brian have all had deep interactions with that infrastructure for a long, long time. We've done phenomenally. All of us, I don't just mean the companies, I mean the whole sector to build what we've managed to build. The challenges for us today is genuinely those universities are facing an ever-tightening belt. University of Abertau, obviously, in recent years hasn't had its troubles to seek. And if we don't really get behind what we've kicked off and what's taken 15 or 20 years to get here, I really am very, very concerned about that great work that's been done, not least of which Colin referred to the day-to-day digital competition. As far as I'm aware, that's no longer going to be run in the same way. It's no longer going to be about incubating new talent. It's going to be more about demonstrating what Scotland's doing at the moment. That's not investing in the future. If we don't spend the vast majority of our intervention and our time as an ecosystem worrying about the talent supply, we don't have an industry. The 1,000 people across the road will not be sustainable. They're already seeing a really burgeoning sector in Scotland around all sorts of digital media that I'll happily come back and mention later. It's phenomenal time for Scotland in the next 5 to 10 years for these related sectors. The thing that we all share in common is that we need talent. Again, it's STEM as well. It's STEM subjects at school. Royal Society of Edinburgh did some great work in getting computer science back on the agenda in a positive way. There's a lot of initiatives around coding that are leading our younger children to realise that that can be a route forward for them. Diversity is needed. It's been far too long seen as a male-dominated geeky type subject. It's not a very broad range of skills. As Colin mentioned, taking products to market is not all about software development. It's about marketing. It's about publishing. It's about analytics—all the new digital economy roles. One only needs to look at Seattle and the post-industrial, post-oil crisis time of Seattle in the 70s to Seattle today, which is one of the world's strongest digital economies, with not a particularly bigger population than Scotland. It's about equivalent. It was created in a 20-30-year time period by big businesses. I'm really wanting to focus there and build talent. That's what we've got to do. I commend you to look as strongly as possible at how you can support us on that basis. As I said earlier, Scotland is very well provided in terms of higher education. We have four universities. Aberty is, as Chris said, a world leader, a pioneer in offering game-specific courses. They've now been joined by Edinburgh, Napier, Glasgow, Caledonia and the University of the West of Scotland. When it comes down to ties with industry and making sure that those courses are relevant, there are a number of ways that universities are doing this. Again, Aberty has six of their games courses accredited by Creative Skillset, which is the UK-wide body for skills and training. The accreditation has an awful lot to do with ties with industry and ensuring that the content, the teaching and the learning outcomes are all relevant to what's happening within the industry. The same body also offers the trainee finder programme, which allows graduates from those courses to join up to a massive database, UK-wide database, and find companies that are looking for new talent. Creative Skillset will fund 50 per cent of the costs of taking those trainees on. As a route into the industry, it's exceptional. However, that was tied into the closing skills investment fund, which was announced by the Westminster Government. That has not yet been renewed, so that programme is closing for Scotland, Northern Ireland and Wales, which leaves us with an awful lot of trainees out there who will be finishing at the end of this financial year. Hopefully, they'll be moving into industry, but moving forward, it's certainly something that the Scottish Government could look at as a route into industry. If we have around about 850 students at Abertape Hall, a rough estimate would be around 12 to 1300 students going through the various universities and colleges. Either they come out and join some of the smaller studios out there, or they set up on their own, or we try and provide those routes into market to give the smaller studios, which is the vast majority of the games-related companies in Scotland, the opportunity to bring new people on board. I think that there's no doubt that the accreditation process and the high level of industry involvement in that has really helped to bring on a strong portfolio of courses at Abertape and elsewhere. That's a really positive thing that we need to preserve. But there are a lot of other issues in that where we've been involved in other projects such as the prototype fund such as DARE, there isn't an easy way that funding for universities is measured that takes account of the benefits of those types of impact. That makes it very difficult. Notwithstanding the existence of SCIP, which is supposed to ensure that all the agencies, including the funding council, are joined up in the way that they look at this and think about this, I've never managed to persuade anyone that some of the impacts that we've created from things like DARE and the prototype fund should be measurable outputs in the way that funding comes into universities. In a sense, that's a disappointment. Just a couple of things picking up on the wider questions. I do think that notwithstanding the accreditation process that we need to make sure that we attract talent from as wide an area as possible now in the games industry as all sorts of new audiences and markets are opening up. In Scotland, we've got some fabulous talent across all of the arts colleges. We've got fantastic talent doing computer science degrees. We need to make sure that some of those individuals are attracted into the sector, so there needs to be a lot happening in this serendipitous ecosystem that I'm going to keep talking about, bringing those people in. More than anything, I'm going back to this point about how we encourage younger people into the sector and get their sites set on this as a career choice. We need to do more to open the whole of that up almost as a goldfish bowl, essentially to schools, so that people see real world projects in action. It's one of the things that we did a lot with DARE in terms of launching the showcase event protoplay in the first place and encouraging thousands of families to come along. That's the first step, but a lot more can happen. If we have another stage of the prototype fund, a lot of that is predicated around making sure that, as a condition of getting any public funding, the projects will be very transparent, so people would see entrepreneurial graduates in action in real world projects developing creative content. We need to get the maximum bang for buck, if you like, by creating that goldfish bowl effect. I wonder if you think that there's a particular role for colleges. When you mentioned universities, it feels that colleges are particularly under massive financial pressure, but is there something that pre-courses that get people to point where there's one thing to be a bright young thing? I think that that could be in the games industry, but perhaps for a young woman or whatever, some particular kind of community, they wouldn't think about that. Are there conversations, particularly with colleges, about what are the skills before you get to the point where you would actually think about doing a degree, which would lead people to that? I think that that's that sense. There's a rigor in other—if you're going to do an engineering degree, there will be things that you can maybe offer at college that would get you to the place to be able to do that. I wonder if there's even that discussion in the sector around that. If I can jump in. As I said, there are a growing number of colleges that are offering HNCs and HNDs in game development. From my conversations with the colleges, it's an incredibly popular choice for young people. The reality in the wider world is that the tools and technologies to make games have never been more available and more accessible. There are tools out there now, some many that are created in Scotland, which are free to download and use at home, which will allow you to build games just as good as the ones that you see on your Apple smartphone or tablet. You can take that through and publish things. How are we attracting more people into games? I think that we're attracting an awful lot of people into games. It's ensuring that the colleges get the same support as the universities, ensuring that they've got the same strong ties with industry. Again, I believe that this has to be industry-driven as well, just to ensure that we're getting the people coming out with the right skills and mindset. Again, entrepreneurialism is not just sitting in a small room for five years making stuff, but we need to take a step back, as Paul says, and start looking at high school, encouraging far more diversity and ensuring that people are aware that the game sector can be a proper grown-up industry. I've spent the last 20 years trying to persuade my parents that I've got a real job. It hasn't worked to date, but I've got high hopes. Again, it's like showing that games are not just about the hardcore coding and the hardcore art and animation. We need the analytics, the data analysts, the computer scientists and all of these incredibly diverse and creative roles within the sector. I don't think that's being communicated effectively. When it comes to the game sector in Scotland, we are still a little bit insular, a little bit isolated, and something of a black hole. To pick up on that point about schools, curriculum for excellence was designed to build in a lot of opportunity for interdisciplinary work. Games provides fantastic opportunity for that, but teachers don't have the time or resources to really capitalise on a lot of these real-world projects and bring them into the classroom and fill those interdisciplinary slots that are there in the design but don't seem to be being taken up very much in the classroom at the moment. The final thing that I was going to say, Joanna, is that it's the usual thing with any attractive industry or attractive job. If someone has no point of reference of that at school, you say, how would you ever get into that industry? Then they probably never will, because there's no idea how to get through there. What seems to be changing is the visibility of the games industry in Scotland. We have people constantly coming through our doors saying, I live for Minecraft, I didn't realise Minecraft was made in Scotland, can we come and see? We obviously have to restrict the numbers of people we can give access to our studio, but we're always encouraging and we've been supporting a project by Derek Robertson University of Dundee to take Minecraft into schools, where he's using it as embedded in curriculum for excellence as a teaching tool. Interestingly, over the fact that some of us are getting a bit of grey hair now and we've been in the industry for 20 years or so, we're actually seeing people who've taken unusual career paths. With slightly larger studios, they've maybe come into us completely unqualified to test games or to start working on small bits of levels of games. Some of these guys 20 years later are now have big global careers running studios, heading up some of the biggest game franchises in the world. There's a new phenomenon that's appeared in the past few years, which you'll be aware of in other contexts, I'm sure, but those video bloggers, people who are now starting to build careers out of commenting on games and building huge businesses out of that, there's a 16-year-old guy in Irvine at the moment who goes under the moniker of Elfer Lee, who's one of the most popular Minecraft YouTube characters on the planet. Those guys are building serious careers out of that now, and not having to go through traditional paths. Some of the courses like media studies, some of the core video production and things like that are teaching them skills that are now transferable and becoming a core part of the games industry. It's ever-evolving. It's back to this point of strategy. I don't think that we can stamp out a one course that will do this games industry for the next 20 years. It's real core understanding that digital media and the skills associated are quite broad and generic, but their skills are well worth having right now because some of the biggest and best opportunities anyone will see over the next 20 years will be within these industries. I've got two members who want to come in with follow-ups on this question. Fascinating discussion, gentlemen. Thank you for coming along today. I want to come to Brian with a particular question from your own paper and then broaden it out. First of all, obviously, I'm a slightly different chronological position to you, and it's my kids who don't believe that I've got a real job rather than my parents. Fascinating how you've got a situation, Brian, according to your paper, that describes a position where you've got more graduates than can be accommodated by the industry, but there are skill gaps. That seems to say to me when you sit alongside something that Daniel Livingston from Glasgow School of Art or Brian McDonald from the Caledonian said that although we're getting all these graduates, a lot of them are almost immediately leaving the Scottish scene to go elsewhere. I guess that comes back to Chrissie's and your own discussion that you were having about critical mass, about capacity and about scale. Is rock star the beginning of, in terms of the scale of what's going to happen across the road here? Where is this going to go and will we be able to retain a lot more of that talent in the future to help to contribute to the Scottish economy because we don't, others are going to get the benefit? Oh boy, there's a big question. Okay, I'll go first. The nature of the industry has changed as Chrissie stated earlier in the early days when we were all creating games for games specific devices, home consoles and the like. You needed a large team, you needed a lot of upfront investment and as a result of that, the studios that existed were quite big. There were certainly 50 to 100, sometimes 250 people. That has changed. Again, the evolution of the industry has meant that the majority of game creation companies, game studios now are under 10 people and the reason for that is that the majority of games are now being created for smartphones and tablets so you don't need 150 people and x million pounds up front. You can now create a game for your Apple iPhone or your Android tablet with two guys, a good idea and some spare time. The nature of the industry has changed quite dramatically. That does not mean that companies cannot scale. If you look across the sector in Scotland you will see a number of studios that have actually grown from very humble beginnings up to 30, 40, sometimes 50 people and above. Again, the waiting tends now to be towards the smaller studios and in the smaller studios you need more people who are multi-disciplined. If you are just in a really small studio you might be the lead programmer but also have to do the marketing or you might also end up doing the payroll or you might be the one who is going out and doing the business development. The small studios are having to combine multiple roles within individual people. The larger studios, because they are fewer and further apart, mean that we have a problem with some senior staff. There are people working with companies in Scotland and if their particular company has problems or closes its doors, they are going to leave because there are very few other companies that can accommodate them. It is an issue, but it is one that would be solved by the studios growing and becoming more sustainable. That is certainly an area where we as an industry need to really focus on and try to make sure that we are producing the sustainable businesses that have the scalability to compete on a global market. I would probably take a slightly different view than Brian, but I would agree with a lot of what he said. The smaller studios are quite prolific because it is so easy to start and say that we have enough money to last us for six months and that that is enough for us to get a game going. It is inevitable that most of those guys are not going to succeed. They will appear in the blaze of glory, put their game on the market and then it will not sell and they will find someone else. That is fine, because some of those guys will succeed and there will be some amazing things out of that. That is an additional strand to the industry that did not exist. It is not a replacement strand, so it is not that people have stopped making games for consoles or games for PC and big high-budget games. It is just that there is a new market that has appeared that did not exist seven or eight years ago for games on phones and devices. What has started to happen on the bigger console games is that there is even more money going into them. 50 million, 100 million would be numbers touted around as to how much budget a rockstar, for example, would spend. Economically, that has a huge impact. Whether or not New York is gaining the lion's share of revenue when the game goes on sale, there are enormous salaries and bonuses and taxes being paid in-country right now by those businesses, and they are constrained by talent. To your point, where is this dichotomy between we have an oversupply of graduates but people are screaming for talent? Actually, if there clearly is a bit of a mismatch, under graduates, in the point that they just graduate, they are really still trainees. They are trainees that are coming into the industry and if they are coming in a really skilled high-end job, it will be a number of years before they are really contributing in a core part of a bigger studio. A bigger studio will have a training programme that will take maybe a year for a graduate or a couple of years, like any big company has a graduate training scheme. When you want to grow quickly and instantly, you actually want people in it at above a graduate level. To that extent, we are reasonably well balanced in the undergraduate population. The industry just needs to grow a bit more. There is a really interesting point in our inflection point in Scotland's digital history that we are going through right now. I term it that we have a couple of black swans swimming around today. If you are familiar with the book that was quite popular a few years ago, nobody—a black swan did not exist until someone found one on the back end of Australia, so it was some perceived wisdom that could not happen, and then suddenly it did, and suddenly there was a whole flock of them. That happens in the digital industry a lot. In Scotland right now, we have two amazing digital media businesses that are fundamentally based in Edinburgh in Fangill and Skyscanner, who are venture capital backed, both principally venture capital backed from Scotland and the United States of America, Silicon Valley, if you will, and both highly likely—both incredibly successful already—highly likely to go for an IPO for billions of dollars or sell for billions of dollars. Right now, those companies are employing every talented digital media graduate and person that they can find or bring to Scotland and are expanding outside Scotland at the same time. They are having a displacement effect to some of the games companies that people are moving to those companies, but that is not a problem. That is just a challenge that we now need to address, because when those black swans become apparent to everyone, Scotland will become an attractant for international capital and digital media talent like we have never seen before, and we need to work out. That is definitely a national question. How do we take advantage of that? How do we not look back in 10 years' time and say, wow, we had those two and a couple other things happened and then we are still where we are? How do we use this as our inflection point to become the Seattle of Europe? I believe that those businesses will be significant to that, and the businesses that spin out of them. However, I think that we have this other cluster of digital games businesses, which are the smaller ones, all the way to the larger ones, who are screaming for that talent base. It will come from there, but the other big question is how do we attract and retain that talent from abroad? If I look at my own studio, 60-70 per cent of the staff are not Indigenous Scots. They did not train and go to university for their first degree here. Some of them did post-graduates here, but most of them came in to work in this industry and then either directly for us or for others and moved to us. The classic thing that happens in the finance sector is that very high-quality graduates come to Scotland and go to London because there is a critical mass. If they do not work at Morgan Stanley, they can jump to Goldmans, they can jump to Society General, whoever it is, we need the same thought here. Right now, if you want to do that in the games industry, then California is clearly the hotbed. There are thousands and thousands of companies that you could choose from over there. Canada has a few really big clusters in the same way. Scotland is right on the cusp of other and the same thing. It is a question that I am not suggesting that I could give you an answer to today, but how can we make Scotland a more attractive environment for those very mobile, generally young but not necessarily all graduate age dynamic individuals who can go anywhere and we want them to choose Scotland? That is a key question that the whole nation can help us to answer. Is this down to the games industry themselves to make this happen, or are there Government interventions that can enable that transformation to get us to the place that you envisage? I think that there are Government interventions to me in three or four key areas. I think that we are doing quite well around the fiscal support in a number of ways. I am both on a systemic taxation and a laser intervention of grants and things like that. Strategy and signposting could help that to perform a bit better, but I think that we are doing pretty well on that. The other three areas are please continue to fund education as strongly as possible in the widest possible way that we can in areas that support us. Immigration policy is crucial to this. We have got to be able to get high-quality talent with high-quality skills into Scotland instantly when we need them. We have got to be able to do that. The retention is a quality of life issue. That is about a healthier, fairer and more wonderful Scotland to be part of. In Dundee's case, if you look at the vision that has been shown by the Government and the City Council in terms of the waterfront regeneration, the V&A and the partnerships between the universities, that is what is going to do it. Realising that vision will create a place where Dundee is already the UK leader in life sciences. We are not far off being the UK leader in this industry and it is that kind of environmental regeneration that is the place to be. It is not just about Dundee, but about the whole of Scotland. I think that we can do it. Clearly, there is a massive role to be played out with industry and by Government specifically in that. That says exciting jobs in an exciting country at the same time to attract the people we need. I am going to bring it in before I do that. I just want to comment that we are two thirds of the way through our time and I am halfway through the list of my questions. I know that you have all got a lot to say and it is all extremely interesting, but we can tighten up a little on the responses. That would be helpful. I will try to be speaking here. Thank you very much and I really enjoy this discussion, gentlemen. I remember the first time that I went into a game shop with my son and he convinced me what the game was best for me to play and what to buy. It is an exciting industry, it is a money making industry and it is something that we really need to get into. I am reading from some submissions. The Scottish games industry needs to focus on translating the existing creativity and critical acclaim into solid commercial success. We have all these and I would not suggest that you are a geek, by the way, as you said earlier on. Excellent people who are developing excellent games, but they do not have the commercial possibly in some within companies to forward it on. Retain the talent in Scotland, simple answers to help teams find sustainable commercial success, and a comment that was made about locally in the city centre, rather than out in the innovation part. One of the interesting comments that I saw was that you should be creating, you were basically going on about this, Chris, create a national company for play that can help. The funding may be there, the creativity is there, but do we need something to drive it on? I know that you said earlier on that the industry can do that and drive on, but do we need a national company for play that is similar to the national theatre, etc.? Minutes to think, I know who submitted this, so I am happy to do it. I did not want to name the person, but I will. That is quite all right. I did my homework, I read them all. David Thomson, director, Llyw de Mettricks. One of the issues that we have at the moment is that the game sector has reached the position that it is in right now, primarily through commercial success or lack thereof. It is inherently risky to create new intellectual property. It is a risk, we do not know whether something is going to work. If you look at the big console market, where the major publishers are funding things, it is all about minimising risk, which is why you have sequels and franchises and FIFA 15. It is all the games that you know are going to sell, so you do not mind ploughing the millions of dollars of investment into it. Several of the companies within Scotland have had this discussion on an ongoing basis, which is how do we innovate, go out and explore, work with theatre companies, film and television, authors and musicians and find new and interesting ways of using interactivity and the devices that are out there. Your smartphone now is voice enabled, it has HD video both ways, it is location aware, it is motion sensitive and so great, we can collect coins, rescue princesses and blow stuff up, we are good at that, but how do we try and move this forward and not only innovate in a playful way but innovate in a way that can help to draw all the other creative industries together. There are a growing number of people who suspect that it could be either a centre for play or a company that focuses on innovation and using digital media and interactivity in new ways. There are a number of examples around the world. Canada has several, Seattle oddly enough has a number, where it is just big building, loads of free wi-fi, come along, join in, sit down and essentially there is a small amount of funding there to let people go and explore and experiment and it is out of those ideas and this innovation that you can then find the commercial success and you can then find the scalability and sustainability to go out and make something totally awesome. I would say that idea chimes with Paul Durant's talked about it, what the prototype fund was and that kind of risk money. It is small, tiny little lumps of it that people can go and just try stuff and do stuff and experiment and innovate. I do believe that that can be done within an academic environment if it is funded properly, it can be done independently, that is all fine. I would not argue against that. I do think that we already do very well in co-funding alongside privates. The Scottish Investment Bank has a co-investment policy that has been very successful. We have companies like Outplay, which are funded by Pentech and Edinburgh, who access Scottish Government investment through that co-investment route. What you do not want to do is to suggest that we can suddenly magically create an organisation that will be able to pick hits because we absolutely cannot. The biggest companies in the world find it difficult to do that. How we could possibly dream that we could set something up that could be, oh, there are the three guys in the back of Glenrothes that will do it, we will back them, they just have to find their own way to market. However, if there are ways that they can try stuff out in a good environment, I do think that putting that kind of accelerator incubator structure around them, so they are not just left to sit in a corner and try stuff, they have people who can peer mentor them about, hey, listen, you might be having fun on that, but where is the funding going to be from in three months? You better get out talking to the funders now, you better build a prototype that people can play. Who do you know? Oh, I do not know anybody well, here is who I can introduce you to. Those models just getting like-minded people around are brilliant. The other thing is that, of course, there would be a wonderful place for indigenous publishing organisations to start. I think that if you look at companies like Outplay, you look at companies like Tag, they are trying to create that kind of model at the moment as well. We have generated a lot of capital from the industry that we want to look for projects to invest in and expand our own business, but only at the right timing and in the right way, so it is not going to be a magic wand that will suddenly have 1,000 new games companies funded tomorrow. Those kind of things will do one or two a year, which is the way it is if you look at the big publishers. It is very akin to the film industry or the television industry or the music industry. There might be a lot of activity going on, but when you hone it down, there are 1,000 times more people trying to break in than are funded, so it is not unhealthy. I think that what we have tried to say is how can we help ourselves to hyperperform relative to others out there? By the way, that is not a bleating session, as I said at the start. We are doing really well as a sector. In 15 or 20 years, we have grown one of the world's most recognised clusters for games development, with, as we have said earlier, at least two of the biggest selling entertainment, not just games entertainment franchises in the world, developed here in Scotland today. That is a brilliant springboard for future success. Gordon, that is going to be another good morning. We have touched upon this morning the support that you get from the likes of Scottish Enterprise, Business Gateway and so on. What type of business support is available? How effective is it, and more importantly, if we are going to continue to grow the sector, where are the gaps that need to be plugged in order to continue to grow? I mean, from my point of view, there is a fairly broad range of support available. Scottish Enterprise has a number of different grants. There are a number of people who have won business from TSB. There has been some games involvement with Creative Scotland. I think that there are gaps. I think that things could be more joined up. For me, it comes back to the entrepreneurial thing. The people who are accessing these funding sources are entrepreneurial types. They are not necessarily the most deserving, they are not the most creative—sometimes they are. For me, it is about opening up the sources that are available to everyone else. Some of that is signposting, but I think that more of it is about getting that spirit in our new creators who are coming through the new teams. I think that things such as Prototype are there to be digital. That is fostering an environment in which people are thinking on their feet and are figuring out, okay, right, where do I get funding for this? How can I take this, and rather than thinking about what is the next technical challenge, I have already built this. How can I exploit this? How can I sweat this asset? There are gaps, but to me that is not the main problem. I think that we can do more to foster that entrepreneurialism and those people will then go out and find the funding that is out there. I agree that it is much better to create this real-world environment with small amounts of funding that allow real projects to happen where, as has been said clearly, it is not about picking winners, but the greater the volume of original IP being developed, the higher the chances that something will bubble up to the surface and be spectacularly successful. But whilst all of that is happening, there is a huge amount of real-world learning from all of those engaged and some of the graduates who we have heard are not yet oven-ready, become oven-ready by the time that they have worked through perhaps a little start-up of their own that may fail. They perhaps just get a single title out there that does not do anything, but that takes a huge amount more experience to an interview with a larger company and they will probably then get hired because they will be able to talk through that story. Coming back to the previous point about whether you need some sort of entity, some institution that is established, I think that we do not. I think that it is much more about creating this unbounded thing. As soon as you start drawing boundaries around it and creating metrics for it, then you have a problem. We need something that is much more fluid than that so that we can capitalise on the things that none of us here know about but are going to be spectacular successes in this sector in the years to come. I think that we suffer from an embarrassment of riches when it comes to the public sector in Scotland. We have Scottish Enterprise, SDI, HIE, Talent Scotland, Interactive Scotland, on the previous point, Arts and Business Scotland is one that I came across recently. At my last count, there are between 25 and 30 public and private sector organisations who are actively trying to help the game sector in some way. Just finding out what they do and how they can help is essentially a full-time job. Colin was right that a large part of it is signposting, but it is the visibility, the transparency that will allow the people who need to find out the difference between Scottish Enterprise, SDI, Skills Development Scotland and Creative Scotland, who we have not even touched on yet. It can be a significant stumbling block when it comes to where do we go next. We need to improve the information that is available and the visibility of all of the above. In terms of funding, part of the funding would be from international sales. We have already talked about the fantastic successes of Minecraft, Lemmings, Grand Theft Auto V. What kind of support do you receive to help us to oversee sales? Is it the correct kind of support? Reading through some of the written evidence, one comment is that we found the support provided by Scottish Development International in particular to be of utmost importance and value, but another director commented that SDI is responsible for helping games companies to attend industry conferences such as the Game Developers Conference, but has no flexibility for helping companies to attend consumer-focused events. Have you got the right kind of support in place in terms of SDI? If I refer back to an answer that I pointed out earlier about, Scottish Enterprise's initial foray into support us, it was all around E3 and helping Scotland to become a coherent brand. It is not to be overlooked how seminal a moment for the Scottish games industry was and how different from everyone else it was. There were no other countries banded together on one-stand-paying for a space at a big international trade show when it was Sony, Microsoft and Scotland, right beside them. Very quickly, we had colleagues in the rest of the UK screaming that this was unfair at the time. It was a brilliant initiative by Scotland, and we really stole a march on people and benefited greatly. That continued support is really important. It is worth making sure that we dovetail properly with UKTI, because UKTI is doing a pretty good job around similar things. Support to go to these big international trade shows and not just go and attend because anyone can do that, but go and attend with a brand behind you if you are two guys in a shed in Dundee. You are turning up in your brand Scotland and you are being introduced to the right people. You have credibility and they do a phenomenal job. Interestingly, when it comes to export markets, we do not have the same challenges as food and drink or engineering. When it comes to exporting our product, we press a button and it appears wherever it needs to appear. The global distribution networks that Apple, Sony and Microsoft are relatively easy to access. We do not say that they are relatively easy to become the number one in, but they are relatively easy to access. It is a small number of conversations that you have to have. Peers in the industry will be a far better source of more contemporary contacts in those companies than in SDI or anyone ever can. I think that what that person is possibly alluding to is the fact that in such a fast-moving industry, what was a market last year for guys that make games for games consoles is completely irrelevant for people who are trying to make a game aimed at 18 to 25-year-old females that are going to be on a phone. They want to be at some glamour fashion show, so they want support to get to that. There probably is a case for saying that digital media games guys may pop up and appear in unusual places. The one thing that you need to do if you are going to be successful in this industry is to be global from day one. You cannot think about Scotland as a primary market or the UK as a primary market. You have to think about an international market from the minute you get up. Right now, clearly in mobile and smartphone, Asia and the Asian subcontinent is the growth market and China is opening up, as we all know, at an incredibly rapid rate. That is a place where specialisms in some way such as SDI, such as cultural specialists, could really help us, because there will be very, very few people in the games industry who will have the right networks into those emerging markets. I think that it is interesting stuff, but it also takes us back to the convener's original questions about strategy and direction. Everyone answering Mardy Fraser's question said that strategy needs to belong to the industry, which I think is sensible. Collin used the term shepherding. In spite of the industry owning a strategy, there has to be somebody there who can shepherd the industry on how that actually works. Some of the evidence suggests that it is an ester finding that Scotland does relatively well on the high-tech side and less well on the creative side in terms of competition with other peers. In terms of the public sector landscape, I think that you have described that there are a lot of players. It is not entirely clear that there is a lead player, should there be, and if so, who should it be, is Creative Scotland engaged in the way that is most effective? What about something like a national and digital network, that is a suggestion that has been made in one of the other submissions? Is there a need for the different agencies that are already engaged to pull their knowledge in a new way in order to provide that kind of shepherding function that Collin McDonnell talked about? If I can jump in initially, I think that one of the biggest issues that the sector has within Scotland at the moment is a lack of clarity over the different organisations and what they have to offer. On the creative Scotland issue, they do not have any legacy of working with the games industry. The Scottish Arts Council certainly did not have a Scottish screen. I had only really started talking to them when the whole merger process took place. The organisation has actually funded a small number of projects and award categories in the past, but they certainly do not have any in-house experience with interactive media or any real focus. The 10-year strategy that was released towards the end of last year mentioned that we are all about digital, we are all about innovation. Having picked it apart, there is very little in there that you can drill down into and say, yes, these guys get it. The whole idea of interactive media as transformative technology can help all the other areas of the creative industries. You will be hearing from people in the film sector. Let them come and talk to us about distribution. As Chris says, we can put it on smartphones and devices around the world at the push of a button. There are a lot of solutions to the interactivity that it can offer. At the moment, we do not have any one agency that encompasses that knowledge or has that kind of vision. I think that potentially something like a national digital agency could at least start hooking all of those different organisations together and at least start putting together some sort of vision and very rapidly evolving and iterative strategy for the country. That sounds like a good plan to me. For me, Colin Anderson made the point about the national digital network and I would be careful not to confuse that with some digital agency. The biggest benefit in my serendipitous model about having something like that and capitalising on what was possibly a missed opportunity around the time of the Scottish Broadcasting Commission report that suggested that is that at least you would create some kind of commissioning pool and home market that could feed into this whole wealth of small teams in original IP generation. For me, that is one of the biggest benefits of seeing some kind of national digital network and Scotland perhaps becoming a leader in having something like that. The one thing that I would counsel against is creating an agency or something just for the sake of creating an agency. If you look inside Scottish Enterprise and Scottish Enterprise has been radically restructured over the past few years, you will still find a core of individuals who really understand the sector and who know it and are capable of leadership and facilitation of leadership and the kind of shepherding role that Colin Anderson talked about if they were given the right mandate. I think that there is an organisation and individuals within that organisation of the next structure that have probably been restructured out of existence in terms of being recognisable. However, if they were modestly supported, we could find the right structure to put around that to help us to nail the strategy down and then start to do. How do we connect all those multiple agencies up? From my perspective, I would not want to take Janet Archer at Creative Scotland away from a core mission that she is deeply involved in to start worrying too much about expansion and industrial challenges for the games industry. That is not, in my view, the role of Creative Scotland. However, should Creative Scotland as an arts organisation be engaging, as Brian is suggesting, with this whole new world, of course they are already, but what more could we do? That is with almost a pure art form, which I always see as the initial ideas that then become the commercial successes of the future. One should not ignore that. They have all got a place to play, but somebody sitting right at the centre of that and coalescing it, we have probably got an agency that can do it if we talk to the right people. We have explored quite usefully some of the ways in which the industry has changed and some of the ways it might change and the pace at which it changes. I suppose I am left with a slight concern that even if we have got the right package of business support services and engagement strategies and so on, even if we have got that right, then in a year it might be clearly completely wrong because of the pace at which the industry is changing. I would like to talk about the scale and structure of it. Just very quickly, on a purely factual point, we have got two reports in front of us here, both from September 2014, one from Nesta saying that Scotland has got 5% of the UK games companies located here and one from Tiger saying that we have got nearly 12%. Is that just because people cannot pin it down and it is changing so rapidly that no one is quite sure or is there someone else going on there? I was only going to say that, in the context of the Nesta report, my understanding is that that was their first attempt at a broader classification of games companies, whereas Tiger has been very focused on their membership with perhaps the more conventional description of games companies, so that might account for the slight discrepancy. So they have cast a net wider, but what they are finding more of that is down south and less of it in Scotland, is that it? I think that they are trying to address the discrepancy around SIC codes and the way that companies can register themselves and declare stats. The games industry has suffered from a lack of hard data for some time, UK-wide, but specifically here in Scotland. The last official report that was the 2012 economic impact survey commissioned by Creative Scotland's Scottish Enterprise found that there were less than 200 people in the games industry and it was worth zero. I had issues with that and I think indirectly led to me being here today. We still do not have any official numbers. The SIC code is the normal route that people use, but there is a tremendous variety of companies out there. The diversity is increasing daily. The Nesta report uses data scraping from the internet, so I would tend to think that that is going to be slightly more accurate. That diversity is something I would like to explore and the structure of the industry as opposed to just the scale. I will refer back to the submission that was mentioned earlier from Ludometrics, which suggests that while two categories of companies might have existed for quite a long time, one that does work for hire, they might do a bit of animation for games one month and adverts the next month or what have you, and they might scale up and scale down, but that is basically what they do, and another that is looking for growth and to be the next big thing and might have some venture capital funding or what have you. He is arguing that there is a third category, which should be understood more like a band in relation to the music industry. Some of whom might well harbour the ambition that one day they will create the next big thing, they will have the next GTA or the next Minecraft and they will take over the office that used to be occupied by something called a newspaper. Some of them, though, are the people who have maybe been slightly talked down about in this conversation, the folk who do want to spend their lives in the room coming up with cool stuff or who are a couple of folk in their back room who are doing that and don't necessarily judge their success on becoming the next big global thing. To take Paul's use twice or three times the metaphor of an ecosystem, they are the healthy soil and out of that something fantastic might well grow, but if you are only obsessed with the size of the thing that grows, then you will end up destroying the healthy soil. Do we not need to value and recognise that layer of people who are not necessarily going to be the next big thing? That is where the skills and creativity and enthusiasm are coming from. Indeed, we do. This is one of the biggest changes that has occurred within the UK industry, but again in the Scottish industry in the last few years is the growth of smaller companies, which Dave refers to as boutique companies, who are not interested in scaling, who are not interested in actively going out and becoming the next GTA but who are quite happy to sit and make games and find funding and do work for hire to fund themselves. It is a lifestyle choice. People get into the games industry because they want to make games. I do think that there is a very important part of the sector that may be overlooked if we do not recognise that that is a valid choice for many, many people coming into the games in Scotland. That being the case, is there an argument for saying that we are not just talking about business support services in the conventional sense, but thinking about games or interactivity as a medium through which communication happens. There is a huge amount of money that public bodies spend on communicating things to people. We met a few companies at the showcase on Wednesday who are working with public bodies, I think in one case a health organisation, some with charities, and the games are not just commercial products, they are methods of communicating. Is there not a case for thinking about that kind of relationship with the sector, rather than just thinking about business support for folk to grow? Absolutely. One of my big contentions is that we need to stop thinking about the rescuing princesses thing. Games are moving far beyond that. Interactive media, transformative technology, and we have a number of companies. Quartic Llama and Dundee, who are Aberty graduates, worked with the National Theatre of Scotland to create a game that you can only experience by walking around Dundee. There are no graphics. We have Guerrilla Tea in Dundee in Chunk and Glasgow, who have worked with Cancer Research UK using real-world clinical data specifically to try to speed up research into a cure for cancer. Games are moving far beyond the old models and the ways that we tend to think about them. When you look at the industry, we have, this morning, focused on game developers. We also need to be aware that there are tools, technologies, analytics companies, animators, musicians, audio producers, motion capture studios. There is a whole ecosystem out there around the game sector. If you look at games-related companies, at my last count Scotland had something close to 170 games-related companies or companies who are working with games to some greater or lesser degree. I absolutely think that, again, as Paul was saying, the fluid nature, if it is just you are a game developer, you can access this kind of support, is the wrong way to go, because that is maintaining the silo mentality, which will not accommodate the rapid evolution within the industry. If you got the impression that we were talking down people in the band structure, then apologies, because that certainly was not an impression that I wanted to put over. There is a broader ecosystem and there are issues at different levels, but if you take that band idea, it is alive and thriving. If one looks at about 10 years ago, those received wisdom in the industry was, you know, it is probably time to shut up shop unless you are owned by a giant publisher with infinite pockets, because games budgets are going to be 100 million, and if you cannot make a game for 100 million, forget it, and then phones came along, and then indie publishing and platforms like Steam came along, which gave people access to global markets instantly. In the middle of that, more broadly, the internet, because of the internet and the ubiquity of the internet, up in Stockholm, a bedroom programmer came up with probably his 20th game. He was working for another game called King.com, who made candy crush during the day, and at night he was coding his own games, and the game was Minecraft. He never took any of external funding, he just sweated blood and tears until he couldn't sweat any more, so he put a call out to his small fan base and said, if you paid a little bit, I know that it's not finished, I might have enough to stop working for part of my day job and go part time, and the rest is history. Very quickly he had an enormous income stream coming from the outside world. Now, what happened several years later, I think probably five years later, that business had grown so big that Marcus Persson, sometimes known as Notch, had created this effectively monster that he never set out to do. He wanted to be a bedroom programmer and hang out with his indie fans, so what they did four months ago, which was probably quite well known, sold the company to Microsoft for $2.5 billion, with not one dollar of external financing, not one minute of Government intervention in Sweden, just one guy in a bedroom who then built a slightly bigger bedroom and a slightly bigger business, indeed. However, the point is there to say that there is no lack of recognition of the importance of the fresh talent that are these bands that are coming through, and the next Minecraft will probably come from one of those. I think that that is a huge part of the ecosystem. The point that I was making is that the ones who don't create the next Minecraft but who carry on being that, as I described it, that fertile soil are still crucially important to the future. Vitally important, and vitally important to the whole ecosystem. In our studio, we've got a couple of guys who are trying to build businesses themselves but are coming to get some money to work for us for a while, and we know they'll probably go off and do their own thing. That's fine. That's this kind of creative, and it is that brilliant blend between huge amounts of creativity, technical talent and then entrepreneurial spirit and management to grow these businesses. If we have a thriving ecosystem, we need it top to toe. We need the huge companies, we need the tiny companies, we need entrepreneurial characters that are blending new stuff through, we need access to markets and this ability. Scotland, I believe, is one of those places in the world that has a fairly unique blend of creativity and visual talent, technology talent and hoots by an entrepreneurial drive. We maybe need more of it, but we certainly have it. That's very helpful. Thank you. Paul, do you want to come in? I want one step further, if you think about the way that those searching to address the problem of antibiotic resistance have turned to the soil, to find the gems, to find the organisms that are going to crack that problem. Having that fertile ecosystem means that we'll always have the potential for some gems to be found and discovered and turned into something big for Scotland. A very brief supplementary, and Chris, you touched it on a bit early on, but again, some of the discussion that's truly falling on from Patrick's analogies here is that the world of gaming is moved on. Chris, you mentioned in the early stages about health, tourism, all that sort of thing. Do you see an opportunity for early learning for young people? Obviously, maybe later on down the ageing stream, and it does happen already, to keep older people alert and active by using it. People with learning disabilities, and this is the confession, I've never played a game, computer games at all, regardless of the fact that I use an iPhone 6. Are we looking at the world of people who have sensory impairment, a learning disability? What are the opportunities to take that forward, to engage, not just as a game, but maybe just as a learning tool as well? I'll try to be unlikely, but I'll be as quick as I can to let my colleagues come in. The games industry is the most powerful and engaging form of entertainment in the world. When you get somebody with the right game experience in front of the middle, engage them like no other form of entertainment, and it's been used in education very, very successfully. Back to Minecraft. Minecraft is the single biggest educational tool in the world now. Minecraft.edu is enormous. One of Microsoft's main reasons for investing in Minecraft was its future in education. In terms of individuals who have various impairments or learning difficulties, we've been blown away by the response that we've had from our fans around kids who are either on the autistic spectrum or have other challenges in life. Minecraft being a method of communication that they've been able to use, unlike no other. It's not just limited to us. Across the spectrum, there are huge, huge examples of games being used in both in therapies and also in educational contexts. There are a number of charities around the game sector who try and help us as game developers and also the game industry to adapt and develop games that will work. It's a huge, huge area and one that Scotland should excel in even further. No, just to echo that. I think that we're seeing games used in a huge number of sectors. I think that education and accessibility is huge, but I think that there's almost not an industry that isn't taking something from games. There's now the gamification industry, so yes to education, yes to accessibility, but it doesn't stop there. I have been coming to a whole bunch of different events, parliamentary, public sector and so on, for the last several years and I was always the guy standing in the corner because people would go, and what do you do? I would slink away because there was someone more important to speak to. Now, an awful lot of the interest that I'm getting is from outside the game sector and it's from people in education, it's from people in politics, it's from people in all of the various public sector bodies. Healthcare and working with people with various disabilities or learning impairments is a huge, huge area. We're talking about devices that are ubiquitous, that are in everyone's pockets. As Chris and Colin have said, we're only now starting the process of doing this. Last week, we invited along a project from Aberty University, which is specifically for people with various site impairments and creating games for them in ways that they can interact without having full 2020 vision or without having a number of different complaints. We have been, as Scotland, a pioneer in using games for education. Derek Roberts and the Consularium have done this for a number of years. I think that the problem again is that we don't really hear about it too much. They have tended not to be commercial releases, Dennis. Again, one of my big issues within Scotland is that we're not taken seriously as an industry. Yesterday, there was a huge big piece in the Scotsman, which I know that you'll read, talking about crisis in the film industry and when MSPs call in the film sector. If anyone covers this today, especially the Scotsman the Herald, I will be gobsmacked. The problem is that you're not reading an awful lot about it, but we are doing an awful lot, and there's so much more that we can do. Again, the whole idea of innovating beyond the essential entertainment side of things is something that can only go up and onwards outwards into a global market. On that note, we have to call it a day. We are over our time slightly, but I think it's been a fascinating session. We've all learned a lot on behalf of the committee. I thank all four of you for coming along and answering our questions. The committee will be taking evidence for another two or three weeks on the subject and due course, we will be producing a report. At this point, the committee will move into private session and we'll have a short suspension.