A new report published by TIGA - the trade association representing the UK's games industry - points out that 47 per cent of UK developers now self-publish their own games, with 67 per cent of these developing and publishing titles for the iPhone.
The UK games industry is worth £1 billion to UK gross domestic product - but it still lags behind other countries in terms of public financial support such as tax credits and tax relief.
The massive incentives for overseas development is leading to the UK's most talented programmers and developers being sucked abroad - and tax breaks there are clearly working.
"This Report provides empirical evidence that government financial support for game development in countries such as France and Canada is significant, widespread and impactful," said Dr Richard Wilson, TIGA's CEO.
"At the strategic level, public financial support - including tax credits/tax relief - often influences overseas studios' location and expansion plans."
The lack of tax credits also impacts smaller studios.
Developer Neon Play - which scored a hit with iPhone title Flick Football - would have benefited from tax breaks in its early days.
"If we had received tax breaks and employee incentives, it would have made it a lot easier for sure," Neon Play's CEO Oli Christie told us.
'The government must act now'
"If we want to stimulate this economy and get young, talented developers to take the plunge and get developing mobile games, then the government must act now and not in 12 to 24 months time," said Christie.
"It's a global business that can be run from a bedroom - but the little guys need a helping hand."
Although some of the world's biggest titles - such as Football Manager and Total War - are developed in the UK, it seems that self-publishing iPhone games may be the only way forwards for smaller UK developers.
This cuts the costs associated with big, triple-A titles - an Xbox 360 title developed in the UK costs on average over £4.5 million to develop, whereas iPhone titles come in at a mere £335,000.
Foot in the store
But although the creation and publishing of iPhone titles may seem straightforward, it's still a tricky market to get in to.
"In an ideal world, small British developers would self-publish," said Christie. "However in reality there is such fierce competition on the App Store with over 500,000 apps, that it's incredibly difficult to make a small splash and create successful apps.
"Working with a publisher is often the best option because it's better to have a smaller slice of a big pie than a huge slice of a tiny cake."
Neon Play may have found a trade-off somewhere between indie talent and big publishers in its Brightside Mobile division, though.
Christie said its aim is "to take our experience and marketing power to help independent developers create successful games on the App Store."
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