The string of game studio sales to overseas buyers continues.
Wellington-based NZXR has been sold to Pokemon Go maker Niantic for an undisclosed sum.
But this one is an unabashed good news story about rebirth and survival during the pandemic.
The saga began last May when the US-based augmented realityheadset maker Magic Leap imploded. The once-hot startup announced it was abandoning its consumer business, with 1000 staff being laid off worldwide.
Air New Zealand staff playing a prototype AR (augmented reality) travel game in 2019. AR - made famous in gaming by Pokemon Go - sees digital images overlaid on the real world, either through a headset or AR glasses, or a smartphone camera. Photo / Chris Keall
The cull included all staff at Weta Workshop Interactive in Wellington - a partnership between Weta Workshop (owned by Sir Richard Taylor and Tania Roger) and Magic Leap.
Lead designer James Everett was one of a dozen staff left jobless in the capital.
"At the time, there were 15 of us working for Magic Leap in the co-production with Weta. We had been working with Weta or five or six years by that point. Unfortunately, that [partnership] just ceased to exist as a thing.
"And so we had to make a choice: Do we go our separate ways? Individually we could have found jobs quite quickly. The reason Magic Leap contracted was all of the deals they had on the table dried up because of uncertainty around the pandemic. But there was still a huge demand for senior [gaming and AR] talent."
"But 10 of us decided that we would stick together and try and make a go of it," Everett says.
"It seemed like a real waste to walk away from five years of learning to work together in a very niche, technical space. Head-worn AR is not something that many teams have had the chance to work on in-depth - and most of those teams are inside companies like Magic Leap, Microsoft or Meta".
Everett figured there would be an appetite for an independent, highly skilled team but "the first few months were interesting, I'll put it that way. But then all of a sudden, we got really busy as Niantic came on board as our first client, and we've stayed busy for the past two years".
Niantic eventually proposed that it move from partner to owner, and the San Francisco-based firm bought out NZXR's 10 staff, who collectively held its shares. The deal closed on Tuesday.
NZXR co-founder James Everett. Photo / Supplied
Everett says he's now looking forward to meeting Niantic staff in San Francisco and Tokyo (Nintendo is a major shareholder) - which will be the first time he's met any of them face-to-face following border restrictions.
He says the new American owners were equally keen to visit their newly-minted Niantic Aotearoa. For the time being, there's simply no office to visit, however. Having formed during the outbreak, NZXR never had one.
"A couple of times we looked at getting an office, but then there would be another lockdown," Everett says. And now, with a number of staff spread around the country, he says Niantic Aotearoa might stay office-less.
Should they want to find new digs, their new owner isn't short of a buck. In November, Niantic raised US$300 million ($440m) at a US$9 billion valuation - a portion of which was earmarked for acquisitions.
Everett says all 10 of the ex-NZXR crew will stay on. It was too early to talk about expanding numbers, but he says Niantic has programmes for working with universities, and it's likely students will be drafted from Victoria and Canterbury.
Deals deals deals
And deals have been the name of the game in the industry over the past 12 months as the industry has boomed amid the stay-at-home pandemic and, more recently, hype over Mark Zuckerberg's Metaverse and other virtual worlds - to which gaming platforms are an obvious entree.
Global deals have seen Microsoft agree to buy Activision Blizzard for US$68.7b, Grand Theft Auto maker Take-Two Interactive acquire mobile game developer Zynga US$12.7b and for Sony to pick up Halo maker Bungie (once owned by Microsoft) for US3.6b.
Closer to home, we've seen Sir Peter Jackson sell Weta Digital's tech division to American 3D gaming company Unity Software in a $2.3b deal revealed last November.
Other recent deals have seen Wellington's A44 Games, founded by Weta Digital alumnus Derek Bradley, sold to UK-based Kepler Interactive for an undisclosed sum and Auckland mobile game developer Ninja Kiwi scooped up by Sweden's MTG for $203m (which could reach $266m with earnouts). Earlier, China's Tencent took a majority stake in West Auckland's Grinding Gear games in a $100m-plus deal.
Advocates for the fast-growing video gaming sector - which is heading toward being a billion-dollar export earner by mid-decade - point to jobs being kept local, with offshore owners able to inject investment and add global marketing muscle.
Not all of the action is one-way. NZ's largest game studio by staff, PikPok - which employs close to 200 - last month acquired a 20-strong game developer in Columbia. Founder Mario Wynands said first choice was to hire locally, but a talent squeeze, made worse by border restrictions and a failure to match incentives offered by Australia's Government - had forced him to invest offshore.
