“The games industry is a huge success story, and is growing at a phenomenal rate, with retail sales of games rising by 26 percent in 2007,” writes David Braben in an Edge-Online keynote published on Tuesday.

But, he adds, “The corresponding growth in development is mostly happening outside the UK, due to a formidable combination of factors including high costs, substantial government assistance overseas and a [domestic] skills shortage.

“Without change, we will see more companies opening offices overseas, and ultimately the industry slipping below a critical mass,” he warns.

Braben’s Frontier Developments has joined forces with a number of UK games studios and trade bodies to create a campaign called Games Up? in order to raise awareness of the industry as a whole, and to warn the UK government about the increasingly uneven playing field that is threatening the future of the UK development sector.

“We believe the government needs to act now, while the UK industry is at the top of its game, rather than wait for a great British industry to go the way of the British film industry before government stepped in and gave it a tax credit.”

However, some of the proposals championed by Games Up? have been met with a noticeable degree of resistance, with UK culture minister Margaret Hodge saying recently that the government is nervous about offering tax credits to the games industry, and must see evidence that the sector is headed for a “genuine market failure” before it can be convinced to do so.

You can read more of Braben’s views on the state of the UK games development sector and about how the campaigners behind Games Up? are facing the industry’s challenges head on in his recently published keynote here.