The PwC tower at Commercial Bay. Once upon a time, its top floors would have been occupied by a top law or accounting firm. But fuelled by Tencent money, Rocketwerkz will be moving in.
The PwC tower at Commercial Bay. Once upon a time, its top floors would have been occupied by a top law or accounting firm. But fuelled by Tencent money, Rocketwerkz will be moving in.
The Trump administration has followed up its campaign against Chinese telecommunications companies Huawei and ZTE with a presidential order banning Chinese apps TikTok and WeChat.
TikTok may escape the wrath of the White House if a sale of its US (and possibly Australia and NZ) assets to American company Oraclegoes through.
But it seems that Trump's war on WeChat owner Tencent might have only just begun.
WeChat - a social media and mobile payments app that claims around 1 billion users worldwide - is Tencent's most public face. But the Chinese conglomerate has also bought significant stakes in various computer game companies around the western world over the past few years, and the US government has just opened a probe into those investments.
Along with Alibaba, Huawei and Baidu, the company is a global symbol of China's might, the New York Times recently said. That puts a big, fat target on Tencent's back, whether it's in terms of the US-China trade war, allegations of spying on its users, or both.
As with telecommunications hardware and software, and social media, the White House has raised fears that data collected by Tencent-controlled gaming companies is illicitly shared with the Chinese government (something all Tencent and its peers deny).
Online gaming is strategically critical for China not least because it forms the financial backbone of Tencent, one of its largest companies (its Kong-listed shares were recently trading at HKD$505 for a market cap of HKD$4.8 trillion or $880m). A key facet is that Tencent's transaction technology can be used to manage in-game purchases (say, some fancy armour to help you get ahead in a role-playing game) - a huge sector, approaching US$32b a year, with growth driven by locked-down consumers.
That has the potential to bring two New Zealand companies into the frame.
Tencent is best known for buying significant stakes in US gaming outfits like Call of Duty maker Activision and Fortnite maker Epic Games (and, outside gaming, the likes of Tesla, Snap and Uber).
But its investments also include a majority stake in New Zealand's largest gaming studio, which cost Tencent somewhere north of $100 million, according to 2018 Overseas Investment Office filing. Plus a series of investments in our second largest game maker RocketWerkz, in which it now has a 47 per cent stake.
As things stand, neither Kiwi company is fussed.
West Auckland-based Grinding Gear Games created an online multiplayer fantasy game called Path of Exile, which now boasts millions of players worldwide.
Co-founder Chris Willson, who still holds a minority state and negotiated a deal that keeps his company's 150 staff in NZ long-term, had no general comment on US government pressure on Tencent.
But he did note that Path of Exile does not use any of the Chinese company's technology.
"It's purely an investment relationship," Wilson said.
The down-to-earth Westie added, "Path of Exile had its best year this year, though we haven't seen the very large increases in player numbers that some other more casual games have had during the pandemic."
"It's purely an investment relationship," Grinding Gear Games co-founder Chris Wilson says. Photo / Dean Purcell
The fact that it's a relatively involved process to join PoE's online world, or leave it, means the game has less volatile number than others, he said.
Rocketwerkz chief operating officer Stephen Knightly saw the Trump crusade as a non-issue for his company. "The Tencent situation doesn't really affect us," he said.
Knightly said RocketWerkz is now just days away from moving into the new $1 billion PwC building at the waterfront Commercial Bay development in Auckland. His company will take the top two floors of the tower, which could be the most expensive real estate in Auckland.
The PwC tower at Commercial Bay. Once upon a time, its top floors would have been occupied by a top law or accounting firm. But fuelled by Tencent money, Rocketwerkz will be moving in.
"We wanted to make a statement. We're scaling the company up and we're doing to the gaming industry what [Sir] Peter Jackson did to the film industry," Hall told the Herald earlier, adding that leasing such premises was a drawcard for new staff (though it's fair to say the move was less popular with some of the company's Dunedin staff who were cut loose during a recent rebalancing between Rocketwerkz operations in the two cities; some vented on social media).
A still from Grinding Gear Games' Path of Exile. Image / Supplied
Occupying the top two floors - where RocketWerkz spent "up to $5m" on the fitout - will also provide a level of security, Hall said.
The fact the penthouse floors on New Zealand's newest office tower are occupied by the maker of a post-apocalyptic shoot-em-up - rather than a law or accounting shop - also says something about the ascendancy of the video game sector in NZ, which is on-track to become a billion-dollar export earner by 2024 - or at least, if a certain US president stays out of its way.
