UK games industry 'needs support'
More software and games are being sold overseas than are imported, a good sign for the economy, said the report. It shows the interactive entertainment industry is doing financially better than film and television industries.
The rising cost of making games has meant many studios have closed however, sending talent overseas.
But he warned more government help was needed if the industry's future was to stay healthy.
The cost of developing titles for the current generation of consoles has already meant some studios have had to shut.
In October, one of the largest and oldest independent games developers in the UK, Argonaut - responsible for the Harry Potter games - went into administration after a severe cash crisis.