New Australian screen incentives will hit New Zealand’s fast-growing games industry, says NZGDA

I’ve long been a supporter of the New Zealand video game development industry and when used to write about games as a journalist I loved it when I was able to talk to Kiwi developers about what they were working on. To that, I thought I’d share the media release from the New Zealand Game Developers Association about what it believes Australia’s recently announced tax incentives for video game development will mean for the $324m video game making scene in Aotearoa.


Australia’s introduction of a 30 to 40% tax incentive for video games will halt the growth of New Zealand’s video games sector, which has been the fastest growing part of our screen industry in recent years, says New Zealand Game Developers Association chairperson Chelsea Rapp.

“Our interactive industry can’t access New Zealand’s own screen incentives, which is bad enough, but now with this competition from Australia, we’ll see a clear brain drain with investment following,” says Rapp.

“While New Zealand has an incredibly talented and globally successful games industry, we can’t compete when you could get a 40% discount to relocate to Australia. Any chance we had of attracting overseas studios to set up shop in New Zealand ends in 2022, and some New Zealand studios are already looking at expanding into Australia instead of expanding locally.”

Over the last decade New Zealand’s video games industry has been our fastest growing creative industry and a major digital exporter. The sector earned $323.9 million in the year to 1 April 2020 and had been growing 42% annually, but this is now at risk. 

The new Australian scheme is similar to the New Zealand Screen Production Grant, which attracts major film and TV productions to shoot here, but which interactive media is banned from accessing. As part of its annual Budget the Australian Government announced a 30% refundable tax offset for video game productions from 2022. In addition, several Australian states top this up by a further 10%. Worth over $250 billion annually, video games is the largest entertainment industry in the world and many countries compete to attract studios. Similar incentives for video games exist in Canada and Europe.

The New Zealand Game Developers Association has already proposed to the Government that our visual effects grant could easily be adapted to include video games as the workers, qualifications and tools used are largely the same. Several large international studios have inquired about moving to New Zealand, including in the midst of covid-19 lockdowns, but have been rejected.

It is also likely that any video game incentives would benefit locally-owned businesses more than Hollywood productions. The Association has also proposed an Interactive Innovation Fund to develop locally-owned productions. “Film productions often leave town when they are finished, whereas a game studio is far more likely to remain in New Zealand, contributing to the local economy and helping to build lasting skills and communities,” continued Rapp. 

Major sporting tournaments will also be attracted to Australia instead of here according to the New Zealand Esports Federation. “This is not speculation, studios and investors are already huddling today about a shift to Australia, in order to be more competitive. Kiwi jobs have unfortunately been lost to inertia. Given the times our Government should be seeking to accelerate the industry not handicap it,” says John McRae, VP of the New Zealand Esports Federation. 

“I fear if this incentive is not met or better we will see a hollowing out of the gaming and esports industry in New Zealand. That will hamper innovation and job creation in related sectors including defence, medical tech, education technology and film.” 

Certainly something for the NZ government to think about, given how successful the New Zealand game development industry is. You can find out more about the Australian Digital Games Tax Offset here https://digitaleconomy.pmc.gov.au/fact-sheets/investment-incentives and find more data on New Zealand’s interactive media sector see: https://nzgda.com/news/survey2020/

A screen capture from Auckland game studio RocketWerkz’s upcoming game Icarus.

Industry plan could create a billion dollar interactive games sector, report predicts

I’m a strong supporter of the New Zealand video games industry: We’re a small country but have some superb development talent on our shores up and down the country.

Well, a new report says that an industry development plan for New Zealand’s interactive media and games sector could create a billion dollar export industry by 2024. Introducing a coordinated plan that invests in emerging talent and allows interactive media to access existing screen industry programmes would create hundreds of hi-tech and creative industry jobs.

Produced by the New Zealand Game Developers Association with support from NZTech, WeCreate and government agencies, the report looks at the social, educational and economic benefits of interactive media such as games, apps, simulations and virtual reality.

“Interactive media combines two of New Zealand’s strengths – our tech sector and creative industries,” says Cassandra Gray, chairperson of the New Zealand Game Developers Association. “Our aspirational, yet achievable, goal is to see New Zealand become a billion dollar exporter of interactive media, sitting alongside our successful film and software sectors. We’ve made a strong start, but our sector is still young and growing.”

The report identified interactive games as the greatest potential creator of new jobs and export earnings. While New Zealand’s games industry earned over $143 million in 2018, the global market is worth $258 billion. Gaining one percent of the global video games market would generate $258 million in new exports. The sector has grown 39 per cent annually for the last six years, and if an industry plan and government support maintained this growth rate then the industry would be worth one billion dollars in 2024.

“Forty years ago our film industry partnered with the Government and we now have a multi-billion dollar screen industry. Twenty years ago our music industry did the same. Our interactive and games industry has reached the stage where it has the capability, skills and international opportunity to similarly contribute significant jobs, exports and social benefits,” says Gray.

The skills developed in interactive entertainment are also being applied to education, mental health and business apps. For instance, fifty nine percent of New Zealand children have used educational games at school.

The report also covers the rise of esports, indie games, virtual and augmented reality, serious games, and Māori and indigenous interactive storytelling.

Interactive media currently slips through the cracks of Government culture, media and innovation policy. To coordinate the industry plan the report calls for the establishment of the New Zealand Interactive Commission, modelled on existing creative industries agencies the music and film commissions, and an interactive innovation fund. The report also recommends that Government screen and cultural programmes be modernised to include interactive media.

Globally, several countries have recently introduced interactive industry programmes. Finland, with a population similar to New Zealand, has an interactive sector worth $3.8 billion annually – 25 times the size of ours – as the result of government support.

Many of the report’s recommendations are already being implemented and will be discussed at the New Zealand Game Developers Conference next month at Te Papa. The Game Developers Association has already increased the support package for its Kiwi Game Starter startup challenge and is introducing a student day, mentoring programme and an industry skills working group.

You can download the Interactive Aotearoa report from www.nzgda.com.

NZGDA to establish startup programme to foster game development growth

OK, I’m not usually one for just doing press releases verbatim but I thought I’d do it for one from the NZGDA (New Zealand Game Developers Association) as it looks like industry is doing extremely well in this little country of ours.

The  bottom line is 134 new high-tech creative jobs were created in the last financial year and the NZGDA is going to set up its own startup programme, the KiwiGameStarter, and is calling on the government’s screen visual effects schemes to be changed so internal game development production will come here.

You know what would be nice? If the Government recognised the strength of the game development industry here and pumped funding into it to make it even stronger?

Here’s the release accompanied by a nice graphic.

Jobs in NZ Games Industry Grow 30%

New Zealand’s video game studios created 134 new high-tech creative jobs in the last financial year, according to an independent survey by the New Zealand Game Developers Association.  The sector now employs 568 fulltime employees and earned $78.7m in FY2015, up 3% on the previous year.  82% of revenue came from digital exports.

The survey shows that established game studios continue to do well but the overall sector’s growth has slowed due to a lack of new businesses being established by either local startups or international investors.

In response, the NZ Game Developers Association is running its own startup programme, the KiwiGameStarter, and calling for government screen visual effects schemes to be modernised to attract international video game productions.

“We expect a good year ahead for the established games studios, but we’re concerned that our pipeline of up and coming studios has dried up,” says Game Developers Association Chairperson Stephen Knightly.

Employment of game programmers and artists grew significantly to 568 fulltime jobs as studios invested in new product development.  Recent New Zealand-made game launches include Outsmart’s Bloodgate, Ice Age Avalanche by Gameloft Auckland, Monsters Ate My Metropolis by Pikpok and Path of Exile’s The Awakening expansion.

“Tellingly, every local games business with more than 10 employees is at least six years old.  We haven’t seen another local success scale up in recent years,” says Knightly.

“Although we have a proven track record, skills and the ability to reach global markets digitally, the survey highlights a scarcity of startups on track to become the next generation of sustainable studios.  Since games are global and digital in nature, with a good prototype it is possible to attract crowdfunding, publishing deals or private investment. But a gap in investment at the early stage is preventing small independent developers from even getting that far.”

To address this, the Association and sponsors have created the KiwiGameStarter where one promising games business will receive funding, software, and business mentoring support worth over $25,000.  A second studio will also win $5,000 plus software.

The KiwiGameStarter competition aims to help early-stage games businesses develop prototypes ready for investment or crowdfunding. It is supported by Callaghan Innovation, ISP BigPipe, Microsoft, game development tool makers Autodesk and Unity 3D, Pursuit Public Relations and Hudson Gavin Martin lawyers.

Playable prototypes and business plans for the competition are due on 28 August.  Details are available on NZGDA.com.

Despite international interest, New Zealand is also missing out on international game visual effects productions because they are excluded from the relevant visual effects incentive.

The Postproduction, Digital and Visual Effects scheme offers a 20% rebate on visual effects productions completed in New Zealand.  The government recently announced a reduction in the qualifying expenditure threshold from $1 million to $500,000 to stimulate demand for post-production and smaller visual effects companies.

“Existing programmes could simply be modernised to include comparable games visual effects and generate a greater economic benefit for New Zealand.  Instead of chasing more but smaller visual effects projects, we could attract higher margin, multi-million dollar game projects.  Video game and film visual effects work are comparable and only one criteria needs to be revised to make games eligible,” said Knightly.

27 New Zealand video game developers responded to the survey which was independently conducted by Tim Thorpe Consulting. Figures are for the financial year ending 31 March 2015.

NZGDA