Struggling New Zealand Gaming Sector Welcomes Government Cash Boost
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Loading... - Rudolf Ludwig
- 09 Aug 2024
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New Zealand's gaming sector is welcoming a much-needed financial boost from the government. New Zealand on Air recently announced the recipients of the Game Development Sector Rebate, which will allow 32 gaming studios to claim back 20 percent of their development costs. Some industry insiders believe this support could spark Aotearoa's next "Middle Earth moment," referencing the global impact of New Zealand's film industry.
Despite gaming being the world's largest entertainment sector in terms of revenue, New Zealand's gaming industry has struggled to keep pace with international competitors. Zoe Hobson, CEO of Dunedin-based mobile game developer Runaway Play, described the past few years in the gaming market as challenging.
"If you look back a few years, the New Zealand gaming industry was growing strongly, with very little or no significant support," Hobson said. "We were seeing an average annual revenue growth of 26 percent, and in 2022, that figure jumped to 47 percent."
However, the situation changed as other countries, particularly Australia, introduced substantial rebates for game developers. In some Australian states, studios could receive up to 45 cents back for every dollar spent on new game development. This shift led to a slowdown in New Zealand's gaming growth and even prompted some companies to consider relocating abroad due to the lack of local support.
Hobson noted that in 2023, revenue growth in New Zealand’s gaming sector dropped to just seven percent, a significant slowdown compared to the previous year.
Finn Hogan, a technology reporter for Newshub who has extensively covered gaming in New Zealand, explained that the local industry began to feel the pressure as talent and companies started moving to Australia. In response, the Labour government decided to introduce rebates, committing $160 million over four years, a scheme that has since been upheld by the National government.
While the rebates in New Zealand won't be as high as those offered in Australia, Hogan believes the 20 percent rebate will be sufficient to retain talent and sustain the industry. "I think 20 percent will be enough to stem any bleeding of people going across there," he said. To qualify for the rebate, studios must have a minimum annual expenditure of $250,000, with the rebate capped at $3 million. The rebate will apply to any direct game development expenses.
