Out of the darkness: Rocketwerkz produced the global hit game Icarus.
Out of the darkness: Rocketwerkz produced the global hit game Icarus.
After stalling growth and an “existential crisis” over the previous two years, the local video gaming industry grew 26% to $548 million in revenue in the 2024 financial year.
It was the first time the industry had crossed the half-billion dollar mark – with most of itstakings, as usual, coming from exports – according to the New Zealand Game Developers Association’s (NZGDA) annual survey.
Revenue per employee shot up to $499,500 from last year’s $390,000 as the number of people employed in the industry – 1097 – only nudged slightly ahead of 2023′s revised total of 1060.
The reason for the industry’s post-pandemic slump was aggressive new video game tax rebates introduced in Australia, which made it harder to recruit talent and had some of New Zealand’s largest game studios mulling a move across the Tasman.
The local industry also needed a leg-up to match competition from the heavily subsidised film industry, which has a lot of crossover in the war for special effects and graphics talent.
The previous Government answered with a four-year, $160m incentive scheme called the Game Development Sector rebate, which allows game studios to claim back 20c in every dollar they spend developing a title. Criteria for the rebate include a minimum $250,000 revenue and all R&D done in New Zealand – a key provision, now that several of the industry’s largest firms have been bought by United States, European or Chinese interests.
Recent years have been "something of an existential crisis", says Rocketwerkz chief executive Dean Hall. Photo / Michael Craig
Even though only $23.2m of a possible $40m was allocated, NZGDA chairman Carl Leducq said the rebate, administered by NZ on Air, had been a “critical lifeline”.
While not as generous as the Australian scheme, which offers a 40c to 45c rebate, varying by state, for every dollar spent on game development, it has been enough to restore hiring confidence.
More than half (53%) of studios expect further growth in the 2025 financial year, with a third forecasting growth of 20% or more.
“The two years prior to last were really hard, something of an existential crisis,” said Dean Hall, founder and chief executive of one of New Zealand’s largest studios, Rocketwerkz – and one of those who had been vocal about shifting across the Tasman.
“In contrast, the past 12 months have seen us catching our stride. We’ve also found hiring much easier, with staff gravitating towards [job security]. We’ve managed to get some innovation in our incentives as well, signing on to AT’s [Auckland Transport] Fareshare scheme to subsidise public transport for employees.”
PikPok CEO Mario Wynands warns there still domestic and global challenges. Photo / Bloomberg via Getty Images
“It is great to see continued aggregate growth from the New Zealand games industry despite otherwise flat global consumer markets and economic headwinds, and continued domestic challenges in funding and talent retention,” said PikPok CEO Mario Wynands, whose firm is the largest in the sector by staff with more than 200 employees, putting it a nose ahead of Grinding Gear Games (the largest player by aggregate revenue).
“These results continue to demonstrate the huge opportunity the industry represents for the New Zealand economy, and what can be achieved when combining Kiwi innovation and creativity with appropriate nurturing and support.”
More diversity
The number of women in the New Zealand gaming industry increased from 22% in 2023 to 28% in 2024 – “and it is interesting to note that 41% of our senior leaders are women”, Leducq said.
A few pain points around hiring remain, including skill shortages and reliance on international talent. Some 98 staff were on work-supported visas as of May 2024, highlighting the industry’s reliance on international talent to address skill shortages, NZDA said.
The most critical roles in demand are programmers (with a 30% shortage), producers (14% shortage), and 2D/3D artists (9% and 7%, respectively), the NZGDA survey found.
The rebound contrasts with the global scene, where the ongoing hangover after the Covid-19 lockdown era gaming frenzy has led to large rounds of layoffs, including around 2500 this year being culled from Microsoft’s gaming division.
“I hear a few international game developers saying ‘Survive to 2025′, but our view is the market has changed and it’s adapt now or die,” Hall said. His firm had boosted its business, in part, through more direct-to-consumer sales.
“I think New Zealand is a really great opportunity for turning games into a huge part of our economy,” Hall said.
Survived the cull ... for now
Like her counterparts in the previous Government, Technology Minister Judith Collins has amplified the NZGDA’s view that video gaming can be a $1 billion export industry by 2030.
The $160m Game Development Sector rebate survived the Budget 2024 cull over various incentive and support schemes for the tech industry, but it doesn’t have a free pass. Collins says she will review its performance two years into its four-year run.
Rebate recipients
$22.3m of $40m available was paid to 32 game studios for the year to April 1, 2024.
Grinding Gear Games
PikPok
RocketWerkz
Ninja Kiwi
A44
Mytona
2Up Games
Niantic Aotearoa NZ
Balancing Monkey Games
Beyond Studios
Blind Squirrel Games
CamShaft Software
CerebralFix
Deep Field Games
Digital Confectioners
Dreamloft Games
Dinosaur Polo Club
Gfactor
Flightless
Hashbane Interactive
Janzen IP Co
Mighty Eyes
Outerdawn
RiffRaff Games
Runaway
Sharpmind Games
Space Rock Games
StaplesVR
Synty Studios
Usual Suspects Studios
Wētā Workshop
Zero King
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
