Video games companies in Brighton and Hove are creating more jobs as they prove playing games is good for business.

Companies such as Climax, Babel Media, Wide Games and Computer Artworks are recruiting staff to take advantage of a strong market for video games. This contrasts with news from other parts of the country, where companies have made redundancies due to increased competition and financial problems.

The lastest victim was high-profile software publisher Rage - famous for its David Beckham Soccer game - which is having to lay off 74 of 155 staff after being put into receivership.

Algy Williams, managing director of Hove-based outsourcing games specialist Babel Media, said Rage's demise would not be the last of the high-profile casualties.

He said: "The games industry is going through a periods of consolidation.

"As with any successful sector, a crowded market place naturally emerges and then corrects itself as the business climate changes.

We've seen extreme examples of this with the dot coms and football clubs - now we're seeing it with games companies.

"Any company that has a solid business model and inhouse talent will survive this shake-out. At Babel we have grown organically and seen our revenues double in 2002.

"This has come at a time when the games industry as a whole has only increased by ten per cent.

"This is testament to our belief that success doesn't come overnight - it comes over time and with a lot of graft."

Babel increased from 25 to 50 full-time staff in 2002 and expects to expand significantly this year.

Mr Williams said: "We've moved into areas such as mobile and interactive TV and hired the best staff available to give us new expertise.

"This year we will be hiring more testers and translators as business continues to come in.

"We're very optimistic for 2003 and I think other local games companies such as Climax and Wide Games would agree."

John Higgs, a games producer for Climax Brighton, which has offices in Hove, said: "We're expecting a good 2003. Some smaller developers are facing problems because they might be relying on a couple of projects but we're big enough to ride out any bumps."

Climax Brighton's outfit doubled last year to 100 members of staff as it ramped up its development of motorsport video games such as Moto GP. It now occupies three floors of Sheridan House.

Climax is the world's largest independent game developer. The Brighton office is now hiring games designers and programmers as it seeks to consolidate its market position.

Wide Games, which was responsible for last year's hit game Prisoner Of War, is also recuiting tools and games programmers, as is Computer Artworks, which has offices in Brighton.

The UK is the third largest market for games in the world, generating more than £1 billion and employing about 20,000 people.