The UK games industry needs government assistance to stop funding going oversea, the industry has said.

The industry’s two leading trade bodies, ELSPA and Tiga, are calling on the government to offer the sort of assistance enjoyed overseas and address the skills shortage caused by a drop in science graduates.

“We’re struggling to compete on uneven international playing fields,” said Ian Livingstone, creative director of Eidos, the company behind hit game Tomb Raider.

“Higher costs, lower access to finance and lower state assistance pose a major threat to our industry,” he continued.

The games software market is worth £18 billion and the UK has been the third largest producer of video games for the last 25 years.

But Britain lost that position recently to Canada, where government aid created a world-beating industry from scratch in just ten years. As it stands, Canada’s growth outstrips the UK’s by four to one. Now, an increasing number of UK companies have begun growing faster overseas than in the UK, some even relocating to subsidised territories like Canada. Recently, SCi / Eidos, the UK’s largest games publisher, announced that it would be moving production jobs to Quebec.

Richard Wilson, Chief executive of Tiga, said: “Without real measures to turn the tide, we’ll see our best people follow the money overseas to where governments are more willing to invest in the future. A great British industry could become a dead man walking, just like the British film industry the before government gave it a tax credit.

The industry is also suffering the effects of a 15 per cent fall in UK science graduates. Meanwhile, specialist game degrees are viewed suspiciously by the industry, which fears non-accredited courses fail to equip graduates with core skills.

Jamie MacDonald, vice president of Sony Computer Entertainment Europe, said: “In recent years, the industry could have grown so much faster if we had access to larger numbers of better trained recruits.

“It’s vital that we tackle the skills shortage to preserve our ability to make global hit games.”

Video games are taking an increasingly central role in Britons’ free time, with 60 per cent of the public now playing them.

Some of the world’s foremost video game franchises began life in the UK, including Tomb Raider, Football Manager and Grand Theft Auto. The latter keeps on breaking world records, selling 70 million units worldwide and generating over £1.75 billion.