After his inept play during a livestream on X, suspicions were raised that Elon Musk (inset) had been "boosting" his Path of Exile account – that is, hiring a more skilled player to log on to his account and boost his standing. Images / Grinding Gear Games, Getty
One of the biggest players in New Zealand’s video gaming sector has recorded another boom year – and revealed a change of leadership.
West Auckland’s Grinding Gear Games - maker of the multiplayer online fantasy title Path of Exile – has reported revenue of $105.2 million for the year to September 30, 2024, up from the prior year’s $83.4m and returning to close to its Covid lockdown high.
Net profit was $38.6m from the previous year’s $29.7m.
The firm finished the year with $22.6m in cash, down from last year’s $60.8m.
Revenue was net of $98.7m in dividends paid to its owner, Chinese social media and gaming giant Tencent, up from last year’s $47.1m.
Grinding Gear Games was founded in 2006 by Westies Chris Wilson and Jonathan Rogers and Erik Olofsson, a Swede they met while playing online.
They used crowdfunding to grow Path of Exile (still the firm’s only title).
In 2018, Tencent bought an 88% stake in Grinding Gear Games for what the Overseas Investment Office said was a “consideration that exceeds $100 million”.
Over the intervening years, Tencent has gradually bought up the founders’ remaining stakes. It now has 100% ownership.
Throughout, Wilson remained as chief executive and held a seat on the board as well.
In January, Path of Exile fans noted his absence from the game. In February, he resigned as a director, with Rogers taking his place on the board and also taking over the reins as CEO.
Wilson was the second of the three founders to depart. Olofsson left Grinding Gear in 2022 to found Erik’s Curiosa, maker of an old-school offline game, Sorcery: Contested Realm.
Wilson told the Herald he’s founded a start-up, Light Pattern – a new game studio that’s recruiting staff. He would only offer: “I am intentionally not talking about my new project for a few years, so that I don’t set any expectations.”
Meanwhile, Rogers was happy to give an update on Grinding Gear’s progress in its new financial year.
“In December, we released our sequel, Path of Exile 2, into Early Access and reached the number one position on the global top sellers list of Steam [online gaming distribution platform] with over 850,000 players online, more than doubling the previous PoE1 [Path of Exile] record,” he said.
“We have over 240 staff in New Zealand now and are continuing to hire – although we are quickly running out of office space.
“Contrast that to April 2024, when we only had 180 staff in-house.”
READ MORE: Video game sector jobs up 20.5% with tax rebate, but half of funds unclaimed
When Tencent took control in 2018, Grinding Gear had 114 staff at its long-time headquarters – a nondescript office building near the Henderson Pak’nSave (a contrast to another Tencent investment – RocketWerkz with its spacecraft-themed digs at the top of the new PwC Tower on Auckland’s waterfront).
“Our major goal now is to finish Path of Exile 2 and get it out of Early Access and into full release. We don’t have an announced timeline for that, but we will continue to release content for it every four months until it’s done,“ Rogers said.
“In the meantime, Path of Exile 1 continues to get content updates every four months as well.”
The rising Auckland staff numbers will be music to the ears of the Government and NZ on Air – or at least a relief that a new 20% rebate is working (an NZ on Air report had total game sector employment rising by a fifth to 1300 in the year to March).
Wilson was one of the industry leaders who said they they would be forced to set up shop in Australia in order to remain competitive in the talent war, if New Zealand did not match the tax rebates being offered cross the Tasman.
Grinding Gear was a recipient in the latest NZ on Air funding round. (The scheme offers 20c back on every $1 spent on a video game, up to a $3m cap.)
Path of Exile has long been a favourite with the fantasy crowd, but also had a mainstream media moment in January when Elon Musk claimed to be one of the game’s top players.
The Tesla CEO and SpaceX founder used X, formerly Twitter to highlight his Path of Exile skills as part of a social media showcase designed to reveal his “world-class” skills playing various titles, which he had bragged about on Joe Rogan’s podcast.
But as the New York Times reported on January 26: “The community of gamers he’s long tried to impress turned against him. It started with a livestream of Mr Musk playing Path of Exile, a popular action role-playing game known for its difficulty. Despite his account showing he had earned one of the game’s highest levels, his game play looked like that of an amateur."
Internet sleuths made YouTube videos and took to Reddit threads to dissect his game play, exposing mistakes a novice would make, the Times said.
There were allegations that Musk was guilty of “boosting” – hiring a skilled gamer on the sly to log on to his account and build it up.
There was circumstantial evidence for the frowned-up practice (and it does go to the heart of the gaming ethos; the “Grinding” in Grinding Gear Games is a nod to what fantasy players called “the grind” of building a character).
“Gamers pointed out that Musk’s Path of Exile account has been active at times he couldn’t have been playing himself, like on Monday [January 20] morning, while he was at Trump’s inauguration,” the Times reported.
Musk was accused of the same jape with another popular game, Diablo IV, for the same reasons.
Wilson has maintained a diplomatic silence.
Meanwhile, Ninja Kiwi has reported a $28.8m net profit on $77.6m revenue for the year to December 31, 2024 – down from its $40.9m profit on $89.5m revenue for 2023.
The result was net of a $32.0m dividend paid to its Scandinavian owner, down from $42m last year.
The mobile gaming specialist was bought by Sweden’s Modern Times Group (MTG) in a 2021 deal worth kr1.2 billion (Swedish krona, $203m) – with kr406m ($68m) of that total being contingent on performance targets.
In 2020, the Technology Investment Network estimated Ninja Kiwi’s revenue at $50m for its TIN200 list of our largest tech exporters.
Ninja Kiwi was founded by Kumeū brothers Chris and Stephen Harris. It first released its hit game Bloons in 2007. The founders could not be immediately reached for comment. The game had some six million active users at the time of the company’s Swedish takeover.
Ninja Kiwi has also been a recipient of NZ on Air’s gaming sector rebate.
LinkedIn Insights says the firm has 18 staff currently, including seven in Auckland (the rest are in the UK – primarily Scotland, where it bought another small gaming studio ahead of the MTG acquisition), from 16 in 2023.
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.