NZTech Inform – game development crisis

Last week I met with Minister Woods to discuss the opportunity for digital in the energy sector to support emissions reduction. There is no doubt that sustainability and climate change response are high on the Government’s agenda. Later in the week I also introduced Minister Clark to several NZTech member CEO’s working in sustainability to illustrate the importance of tech for our emissions reductions. 

While there is plenty of attention on reducing energy and transport emissions, less urgency and attention is being shown to the growth of game development and interactive media.  These are low emission and high paying sectors.  Globally, game development is larger than the movie and music industries combined!

New Zealand now has a burning platform crisis in its game development and interactive sector that needs immediate action from the Government. 

Australia has worked out how valuable the game development sector is and has been announcing and promoting incentives to locate, invest and work in Australia. For example, from July, a 40+ percent incentive (30 percent Digital Games Tax Offset (DGTO) plus 10-15 percent State rebate) will apply. Every $1 million of qualifying expenditure could see a $400,000 cash benefit to New Zealand companies who move resources to Australia rather than stay in New Zealand. The DGTO aligns video gaming with the Australian Post, Digital and Visual Effects (PDV) which provides a 30 percent rebate on movie making, thus treating movies and gaming similar. In New Zealand, game development has been expressly excluded from the 20 percent NZ PDV equivalent. Plus, worldwide, there are over 20 similar schemes with 25 percent to 40 percent rates.

Meanwhile, the New Zealand game developers, a sector that is currently on track to create more than $1 billion in revenues and hundreds of additional high paid green jobs by 2025, is being forced offshore for talent and R&D support. Many of our largest game studios have already halted expansion in New Zealand and have opened (or are considering opening) studios in other countries.

It’s not too late for the Government to recognise game development as a great way to grow a low emissions high value industry for New Zealand. We already have a strong base of studios but as we can see, if local policy makes it too hard for them, they can simply move to Australia.  How about making interactive media and video games an eligible format for the existing 20 percent Post Digital and Visual Effects grant, part of the New Zealand Screen Production Grant, as Australia has done? Or expanding the CODE pilot in Dunedin throughout the country via an Interactive Industry Development Programme? Or simply introduce a competitive 30 percent interactive media grant?

In other news, next month NZTech and Digital Identity NZ are hosting the Digital Trust Summit/Hui Taumata in Wellington. Few topics are as critical to Aotearoa’s future prosperity and the wellbeing of its people as trust. Establishing and maintaining trust in the digital world is relevant to everyone, so I strongly recommend you attend and join the discussion.
 

This week, we’re connecting year 11-13 students and the tech sector at Tech22.  Tech22 is a guided tour of the Wynyard Quarter Innovation Precinct to visit leading companies and explore tech careers. We’ve partnered with Tātaki Auckland Unlimited, the Ministry of Education and the Media Design School to inspire learners into technology careers.  

Ngā mihi o Matariki, te tau hou Māori

Graeme Muller
CEO
NZTech