New Zealand’s interactive games industry is the fastest growing part of our screen sector, but that’s easy to say when you’re new. While we’ve experienced great success by front-footing digital trends, the industry isn’t without growing pains or missed opportunities for greater collaboration.
Interactive entertainment studios in New Zealand employed 568 fulltime employees and earned $78.7m in the year to 31 March 2015, according to our annual independent industry survey (modelled on Stats NZ’s Screen Industry Survey). Growth last year was mostly headcount – 134 new jobs – with only 3% revenue growth, as most studios were in development mode with several launches in the coming months.
400 new jobs in four years sounds great, but to put that in perspective Finland with a similar population to New Zealand has a $3 billion industry. A lack of integration with games in the screen incentives (such as the PDV visual effects rebate which is for identical work to game development) means the NZGDA has sadly turned away large international productions and hundreds of jobs.
The clear strength of New Zealand’s gaming sector is exports of original IP. 82% of our revenue comes from offshore. Only a tiny 15% was work-for-hire service work. The advantage of digital is that we’ve become self-publishers with more direct customer relationships. Apple or Google or Steam take 30% but the remainder goes to the creator. In comparison to other more vertically integrated sectors with more middlemen, that’s a higher margin but riskier way of doing business.
Our survey data shows that we have an established cohort of game studios, who followed this model, had a hit game and built customer relationships, which gave them both higher margins as well as a loyal fan base over multiple years. Hits like Path of Exile or NinjaKiwi’s Bloons franchise or Pikpok’s suite of mobile games worked hard to keep their audiences engaged over many years and not be one-hit wonders.
However, every local games business with more than 10 employees is at least six years old. With one exception, the successes all had initial funding from a previous business and some business experience.
So, we have the skills, reputation, market demand and global reach but face two common well-understood problems: no early stage development funding and no talent development programmes. The missed opportunity is that there is no industry support programme for interactive content and our rise occurred during a period of government funding freezes, yet we offer great opportunity for musicians, writers, actors, animators, producers to earn a living.
Naturally, the New Zealand Game Developers Association does a lot in this space: annual conference, international delegations to key conferences, mentoring, networking. There are hugely vibrant monthly Meetups in Auckland, Wellington and Dunedin which are open to anyone interested in the sector.
Our response to lack of development funding was to run our own $25,000 startup or development programme, the KiwiGameStarter, for the last two years. Thanks to sponsors Callaghan Innovation, Bigpipe, Autodesk, Unity, Microsoft, The Sound Room, Pursuit PR and HGM Legal.
This year’s winner, Dynabrick by Wellington developer Rox Flame, may at first look like a cute robot exploring an alien world but is actually a meditation on the effects of using power recklessly. The player’s own actions have unforeseen consequences on the ecosystem – a powerful storytelling experience that is really only possible in an interactive medium. As an artform, we’ve only just scratched the surface of the possibilities of non-linear storytelling and it would be great to see more investment in this.
In the age of crowd funding, early access (selling access to an in-development game) and more globally-minded publishers it is easier than ever for a prototype (our equivalent of a good screenplay) to attract commercial funding. However, that’s not happening.
Despite great talent and a booming creator community, New Zealand is not developing investment-ready prototypes to take to pitch. The implication for New Zealand is, that while we now have several successful established studios at scale we are not guaranteed to see many more.