Boo to associating Britain with heroic failure. We do this too much to ourselves! Actually, British game development industry is a notable success and has turned Leamington Spa from a byword for chintziness to an exciting place to work.
Not sure which part of it is a failure. Even the articles said > it was successful enough that Lionhead was bought by Microsoft in 2006, and its two sequels also sold well.
- Revolution Software (Broken Sword series)
- Fireproof Games (The Room series)
- Jagex (RuneScape)
- Core Design (Tomb Raider)
- Dovetail Games (Rail and Train Simulator*)
And one that probably few here have heard of: Lapioware - Diesel Railcar Simulator
Mentioning that one because it's a one man show. Made by a man who felt nostalgic for the diesel railcars & landscapes of 1960s Britain. So he ended up making one of the most realistic train sims.