Review – London Digital Games Limited single company EIS

Archived article

Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.

London Digital, a games business, is raising £4 million to develop three PC and console video games. You might think investing in online games is particularly high risk. However, this EIS comes with considerable downside protection.


  • Experienced team includes the founder of Games Workshop and the publisher of Lara Croft
  • Developing three games, building on established brands via a licence approach. The first game will be based on the Netflix series, Narcos
  • Considerable downside protection – as well as the usual EIS reliefs, London Digital benefits from up to 20% Video Games Tax Relief and advance publishing contracts covering around half of the amount raised 
  • Advance assurance received
  • Minimum investment £10,000

London Digital Games interview 

Please note this video has been produced by London Digital and reflects London Digital's views.

The offer

At $91.8 billion, the games market is already double the size of the global film box-office market. People are more likely to use their smartphones to play games than use apps to bank online or check the news. Online games are not just the preserve of teenagers and children: in fact, 54% of UK gamers are between 24 and 64.

London Digital is raising £4 million to develop three PC and console video games. Each game will have a production budget of £800,000 to £1.2 million and will be published and sold on the main console platforms such as Microsoft Xbox, Sony PlayStation and Nintendo.

Rather than jump into untried and untested waters, London Digital looks for licence opportunities. This means developing a game based on an established success and appealing to existing customers who recognise the brand. The management has previously published games based on franchises such as Lara Croft: Tomb RaiderStar Wars, Formula 1, James Bond and Trivial Pursuit. It looks to replicate that model here.

The first game has already been agreed in principle. It will be based on Narcos, the award-winning Netflix series. Narcos follows the rise and fall of Colombian drug baron Pablo Escobar, charting his run-ins with the police. The fugitive storyline and its capture-escape-recapture possibilities have the hallmarks of an engaging game, although there are of course no guarantees.

The manager

The directors of London Digital are industry veterans. They include Ian Livingstone CBE, who co-founded Games Workshop in 1975. In 1982 he co-created Fighting Fantasy gamebooks which have sold over 17 million copies to date. He designed Eureka, the first computer game published by Domark. He oversaw the merger that created Eidos plc and served as executive chairman until 2002. At Eidos he launched major franchises including Lara Croft: Tomb Raider. Ian has been voted as one of the most influential people in the UK’s digital economy and has received many awards including a BAFTA special award.

Joining Ian are Matt Woodley, Director and Executive Producer, and Dominic Wheatley, Special Advisor. Matt has over 30 years’ experience and has been responsible for the marketing and creation of many multi-million selling titles across multiple formats. Dominic is the founder and CEO of Domark, subsequently Eidos plc, publishers of Lara Croft: Tomb Raider and Championship Manager video games. He was the first to publish games based upon the Star Wars, Trivial Pursuit, Formula 1 and James Bond franchises. London Digital will be working in trade partnership with the Catalis SE, a games group which covers all aspects of game design, testing and publishing. Catalis Group claims to be one of the UK’s longest-standing independent developers, having developed over 125 video games, and experienced in publishing across all major platforms. Dominic Wheatley is CEO of Catalis SE. 

Curve Digital, a subsidiary of Catalis SE, will be London Digital’s publishing partner.

Downside protection

This EIS comes with considerable downside protection. London Digital Games benefits from a blend of tax reliefs and sales assurance:

  • EIS tax relief of up to 30%, paid directly to investors
  • Video Games Tax Relief, paid to London Digital against eligible production expenditure (an effective 20% cash rebate on all eligible spend)
  • Advanced publishing contract should pay minimum revenues to London Digital. The contract with Curve Digital covers approximately half the amount raised to develop the three games.

There is also a small potential allocation of SEIS relief available with this offer, limited to the first £150,000.

Target return and exit

The target return is £1.20 on a net £0.70 invested. The management will be entitled to receive a 30% performance fee on returns to investors on an exit above £1.20.

Exit is planned for year 4 through a sale to trade or an IPO. None of these are guaranteed.

London Digital is forecasting EBITDA of £(337k), £1.8m, £1.3m, £3.5m, £7.3m in year one to five respectively. In its forecasts, London Digital has cautiously assumed one game will have a high sales profile, one will be average and one will fail.


  • Development costs may exceed budget
  • London Digital may not be able to source sufficient licensed intellectual property on which to base its games or may overestimate the market appetite for games 
  • We can’t be certain all developments costs will be eligible for VGTR, it is important that London Digital is advised by experts to qualify for the tax credit and maximise its claim 
  • Catalis SE accounts for year ended 2015 report EBIT of 1.1m euros before non-recurring and exceptional costs. After non-recurring and exceptional costs the company reported a loss of 5.1m euros. The majority of this loss relates to the impairment of goodwill arising on the acquisition of Kuju. We have been told this is as a result of strategy change and operational restructuring rather than trading difficulties
  • Curve Digital is providing a minimum sales assurance of around 50% of total fund invested. For example if £4 million is invested, Curve Digital will underwrite £2 million of sales. We would expect some conditionality in a contract of this nature. Additionally the financial strength of Catalis SE should be considered
  • The usual risks with unquoted companies exist with this EIS offer. For instance, EIS investments are illiquid and capital is at risk. Investors should only invest money they can afford to lose. The value of tax relief will depend on the circumstances of the individual investor and tax rules could change in future. 


The fees are paid by the underlying investee company. There is a fundraising fee of of 5% and an annual management charge of 1.5%. The management team is entitled to a performance fee of 30% on any returns above the target return of £1.20. 


The online games market is growing fast and the UK is a world leader in this field. This EIS offer allows investors to tap into this potential, with the benefit of downside protection. The management team behind London Digital Games are some of the most experienced names in the industry.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.