It gave the world Lara Croft, the digitised heroine of Tomb Raider who brought in more foreign earnings than the Spice Girls at their peak. But the computer games industry, the jewel in the crown of Britain's new media revolution, may never again be able to develop a product with similar global blockbuster appeal.
A report from an influential thinktank, due to be published this month, will warn that the games industry, for all its world-beating success, risks being relegated to minor player status by better financed, better organised and more ambitious foreign competition.
With the release this weekend of the Lara Croft movie, domestic games developers are enjoying unprecedented popularity. The company which created Tomb Raider, Eidos, has sold 22m copies of the game since 1996 and last year had a turnover of £195m.
The success is not limited to Eidos. Britain ranks second only to Japan in the authoring of games software in a global market worth over £12bn a year. Home-grown products account for 12% of the US market and 25% of the European market. British game players alone spend £1bn a year, compared with £650m spent in cinemas.
But the new report on knowledge entrepreneurship, to be published by Demos, warns that the very factors that led to the current success may ultimately be the industry's downfall.
"The British computer games industry is at a critical point in its development," the report concludes. "The next few years will prove whether it will suffer the fate of earlier innovative British industries, built on a mixture of entrepreneurship and DIY knowledge - shipbuilding in Glasgow, textile machinery in Lancashire - which were unable to meet better organised, funded and skilled competition as the market matured."
Born out of the home computer craze in the 1980s, the pioneers of British gaming taught themselves how to programme on cheap machines such as the Sinclair Spectrum and the Commodore C64. As the industry has evolved, it has retained this do-it-yourself culture, with power remaining in the hands of self-taught computer enthusiasts.
According to the Demos report, this culture may hold the industry back as the technology and skills required for authoring games becomes more sophisticated.
It is also becoming more ex pensive to develop successful games, and the resources required may be beyond the reach of the average UK company, the report says.
The British industry, despite its strength in developing games, is comparatively weak at marketing and publishing them. Foreign companies, such as the US giant Electronic Arts, or the French developers Infogrammes and Havas International, are far stronger.
Too many British companies lack ambition, focusing only on producing the next game. This cottage industry approach, according to Demos, could be fatal.
"They have a garage mental ity; not enough of them want to be Microsoft," said John Sutherland, who has developed the UK's first computer games degree courses at Abertay university in Dundee. "They don't know how to scale up and there are a lot of small, vulnerable, companies across the UK."
Peter Molyneux, one of Britain's most successful games developers, who sold his first venture, Bullfrog, to Electronic Arts in 1995 to set up his company Lionhead, agreed. "The games industry will never become higher profile until it becomes mass-market. It's all very well to have games that get harder and harder to play. But you are just appealing to the same people that bought your games last time."
• Raphael Gray, 19, who released thousands of credit card details on the internet, was freed at Swansea crown court yesterday after agreeing to a three-year psychiatric community rehabilitation order committing him to constant appraisal, as well as treatment to raise his self-esteem.
Gray, of Clynderwen, Pembrokeshire, said he had expected to be jailed after admitting 10 charges of computer fraud. "I would do it all again but another time I would choose to ensure that I acted legally," he said. He had intended to show the lack of internet security.
