The local industry also needed a leg-up to match competition from the heavily subsidised film industry, which has a lot of cross-over 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, if they meet certain criteria, including a minimum $250,000 revenue and all R&D done offshore (a key provision, now that several of the industry’s largest firms have been bought by United States, European or Chinese interests).

Following a pilot round, the first subsidy recipients were named in June this year, with 32 studios (listed below) receiving funding. Three qualified for the maximum $3m – West Auckland’s Grinding Gear Games (now owned by Chinese giant Tencent), Wellington mobile gaming specialist PikPok and a third recipient that was not immediately named.

Even though only $23.2m of a possible $40.0m was allocated, NZGDA chairman Carl Leducq said the Game Development Sector 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 NZ’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 onto AT’s Fareshare scheme to subsidise public transport for employees.”

“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, who’s firm is the largest in the sector by staff with around 200 employees, putting it a nose ahead of Grinding Gear Games (the largest player by 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. 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 local rebound contrasts with the global scene, where the ongoing hangover after the Covid-19 lockdown era gaming frenzy has seen a number of 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 paid to 32 game studios for the year to April 1, 2024 under the new Game Development Sector Rebate:

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.