The data released by TIGA, the trade association representing the video games industry, shows the gaming sector employs over 2,500 development staff in the South East.
In the year ending March 2016, the South East employed 2,574 development staff compared to London’s 2,418. London, though, was home to more games companies (222).
Dr Richard Wilson, TIGA CEO, said: "The South East has surpassed London as the largest centre of games development in the UK.
"The South East benefits from a number of important games clusters, including Oxford, Brighton and Portsmouth.
"Excellent universities provide these clusters with first rate graduates. The region also boasts some iconic and innovative games studios including Climax, Natural Motion, nDreams, Rebellion and Supermassive, to name but a few.
"London remains a games development powerhouse. The capital is home to 222 games companies, including King, Sony and Space Ape Games and has good access to highly skilled developers from terrific universities and a number of finance providers.
"Although London and the South account for almost 40% of employment in the games development industry, the sector differs from other UK media sectors in being spread very widely across the UK: the third and fourth largest centres of games development by headcount are the North West of England and Scotland, respectively.
"Many of the games clusters in the different regions of the UK are home to innovative studios and are supported by good universities. Policy makers should take further steps to improve access to finance, encourage the uptake of Games Tax Relief and R&D Tax Credits, enhance access to high skilled developeres and strengthen industry-university links in order to nurture and promote local, regional and national games centres."
The 2016 percentage share of the UK’s gaming development sector is as follows:
20.5 % South East
10.3% North West
8.9% West Midlands
8.3% East of England
5.4% Yorkshire & Humber
4.1% North East
4.0% East Midlands
2.0% South West
1.2 % Wales
0.2% Northern Ireland