Two fifths of games companies based in the UK are considering relocating out of the country in the wake of Brexit, a survey has found.

The primary concern across the industry is over a loss in international talent from EU countries creating a skills shortage which 40% say could make them move some or all of their operations. Ukie, the industry trade body that carried out the research, found 57% of UK games companies employ workers from the EU, and that at those companies EU workers represent an average one third of all employees.

Some 98% of those surveyed believe EU nationals who have the necessary skills should be given a blanket right to work in the UK in the future. With a shortage of skilled UK candidates, barriers for EU workers wanting to live and work in the UK would have a negative impact on the industry.

According to Ukie’s latest market valuation, the UK is the sixth largest games market in the world in terms of consumer revenues. Consumer spend in 2016 reached £4.33bn, up 1.2% from the previous year. The country boasts more than 2,000 games companies, with 12,100 full-time employees.

Bossa Studios co-founder and CEO Henrique Olifiers said: “The damaging uncertainty caused by Brexit to our EU employees, and not having open access to the brightest and best European talent, some of whom are now refusing to resettle in the UK, is forcing us to have to assess whether it will be at all possible to produce our future games in this country.”

The future of retail is also uncertain, as about one third of market share comes from physical sales, which may be subject to tariffs when the UK leaves the EU. A spokesperson for games retailer Game says: “We are aware of, and monitoring closely, potential future changes including the possible impact of imposing tariffs on physical products and it is important to us that the UK retains the ease of trade that exists today.” Non-tariff barriers such as content restrictions and data localisation are also a concern for UK games companies.

Leaving the EU may also leave UK companies unable to access funding from European programmes such as Creative Europe, which has funded studios such as the multi-Bafta winning The Chinese Room (creators of Dear Esther and Everybody’s Gone to the Rapture). Studio head Dan Pinchbeck said: “We should be doing everything we can to call for continued inclusion in such programmes post-Brexit, or for our government to provide alternative support for our world-class media industry.”

According to pre-referendum surveys, the UK games industry was largely against Brexit. Since the triggering of article 50, Ukie has stated its resolve to ensure the industry gets the best possible deal, emphasising the importance of improving the immigration system and maintaining ease of trade.

“The Triggering of Article 50 signals the beginning of the end of the uncertainty we’ve all been facing since the Referendum last June,” said CEO Dr Jo Twist. “Ukie will continue to work with government across departments to ensure the industry’s needs are met, particularly around global talent, data and investment in homegrown innovation and creativity.”