2024 Industry Survey Results
23 October 2024

The New Zealand Video Games Sector Soars with 26% Year-on-Year Growth, Surpassing the Half a Billion Dollar Milestone! The New Zealand game development industry demonstrated strong performance in the 2023/2024 financial year, generating NZD $547.794 million in pre-tax revenue, a 26% increase from the previous year. This growth showcases the industry’s resilience and expansion, particularly in global markets. Key drivers of this growth include increased demand for New Zealand-developed games and the sector’s ability to adapt to market challenges. Looking ahead to 2024/2025, 54% of studios anticipate continued growth, with 31% expecting significant revenue increases. Another 34% expect to maintain current revenues, suggesting stability within the sector despite uncertainties in the global economy. However, 12% of studios expect revenue declines, reflecting challenges for smaller or more competitive companies. The industry continues to face critical challenges, particularly in addressing skill shortages. The most significant shortages are in programming (31%) and creative roles like 2D/3D art (9%  and 7% respectively). Studios are relying heavily on international talent, with 14% of new hires sourced from overseas and a total of 97 staff on work-supported visas. This highlights a growing dependence on international recruitment to meet the demand for experienced professionals.

Government support through the Game Development Sector Rebate (GDSR) has been instrumental in sustaining the industry. Nearly NZD $22.3 million  was claimed through GDSR, which helped 29% of studios retain staff and 28% reinvest in their operations. While 11% of studios are considering expansion into Australia, 60% remain confident in local support structures like the GDSR.

In terms of platform preferences, PC gaming remains the top revenue generator, accounting for 51% of developer income, followed by mobile gaming (24%) and console platforms (14%). Emerging technologies like virtual reality (VR) and augmented reality (AR) are gaining traction, with 15% and 7% of developers reporting revenue from these platforms, respectively. 

Efforts to address talent shortages, support smaller studios, and foster international collaboration will be crucial to maintaining the industry’s upward trajectory in the coming years.

KEY INSIGHTS

Current Year Income
The New Zealand game development industry generated a total pre-tax income of NZD $547,794 million for the 2023/2024 financial year. This marks a significant 26% increase compared to the previous year’s earnings of NZD 434 million. This growth reflects the industry’s resilience and ability to expand despite challenges in the global market.

• The 26% increase signals a positive trajectory for the industry.
• The revenue growth highlights the expanding global presence and increasing  
  demand for New Zealand-developed games.
• The number of women in the industry has increased from  22% in 2023  to 28% in 2024 
• 41% of our senior leaders are women.

Income Projections for 2024/2025
Looking ahead, studios have varied expectations for their income in the 2024/2025 financial year:

• 31% of studios expect significant growth (>20%) in their revenue.
• 13% anticipate moderate growth (11-20%).
• 9% foresee slight growth (0-10%).
• 34% expect to maintain current revenues.
• 12% expect a decline, with:
  • 6% expecting a slight decline (0-10%),
  • 2% expecting a moderate decline (11-20%),
  • 4% anticipating a significant decline (>20%).

 A Positive Outlook
Over 53% of studios expect further growth, underscoring optimism about market opportunities and continued success, while another 34% expect stability, suggesting that even in an uncertain global economy, many studios believe they can maintain their revenue levels

Some studios are cautious however, with 12% expecting revenue declines, reflecting challenges for smaller or more competitive sectors.

Key Challenges: Skill Shortages and Talent Movement

 Skill Shortage Roles

• Programmers:
  The most significant shortage, with 31% of respondents identifying the need for experienced programmers.
• Producers: 14% reported a shortage of producers, critical for project management and leadership roles.
• 2D/3D Artists: The creative roles of 2D and 3D artists are also in demand, with 9% and 7%, respectively, reporting shortages.

 New Hires

• Tertiary Education: 16% of new hires came from tertiary institutions.
• Overseas Recruitment: 15% of hires were from overseas, reflecting the industry’s reliance on international talent to fill key roles.
• Internal Movement: 25% of new hires came from other gaming companies, suggesting a competitive environment for talent.
• Not Applicable: 45% of companies did not hire new staff during the period, indicating limited expansion for some studios.

 Skills Lacking in Graduates

• Commercial Outlook: Graduates are seen to lack commercial perspective, particularly in understanding market needs and player preferences.
• Modern Game Engine Skills: There are gaps in graduates’ proficiency with modern game engines such as Unity and Unreal.
• Automation and Tools Creation: Graduates also lack skills in automation and creating editor tools, crucial for development efficiency.

Reliance on International Talent and Visa-Supported Staff

Visa-Dependent Workforce

• 98 staff were on work-supported visas as of May 2024, highlighting the industry’s reliance on international talent to address skill shortages.

Overseas Staff

• Australia: 31 FTEs are based in Australia, while 85 are based in other overseas locations, suggesting some studios are expanding operations abroad.

Hiring Plans for 2024/2025

• 35% of companies plan to hire additional staff, while 47% remain uncertain, reflecting cautious optimism.

Estimated New Hires:

• 45 Programmers (28.1% of projected hires).
• 41 Artists (25.6%).
• 8 Producers.
• 16 QA Staff.

The reliance on visa-supported staff reflects the shortage of local talent, especially in high-demand areas such as programming and production.

The increase in Overseas staff indicates that studios may be leveraging international markets or seeking financial incentives, which are easily accessible in other countries.

Government Support: GDSR and Expansion to Australia

 Game Development Sector Rebate (GDSR)

• NZD 22.3m was claimed under the GDSR program, providing substantial financial support to the industry.
• Impact:

• Of the respondents who claimed the GDSR Rebate for the year ended March 2024:  
  • 38% of respondents reported that GDSR helped retain staff.
  • 27% of respondents hired additional 
  • 35% used GDSR to reinvest in their businesses.

 
Relocation to Australia

11% of studios are planning or seriously considering expanding into Australia, drawn by incentives such as Australia’s Digital Games Tax Offset (DGTO), this is up from 8% last year, however 60% of respondents have no plans to expand into Australia, reflecting confidence in local support structures like the GDSR.

Platforms and Market Trends

 Top Platforms Providing Revenue:

1. PC: 30% of developers earned revenue from PC platforms.
2. Mobile: 15% reported income from mobile gaming.
3. Console: 9% earned from console platforms.
4. Realities (VR/AR/MR): 13% reported revenue from VR, reflecting the growing importance of immersive technologies.
5. Web-Based: 7% generated income from web-based games.

 

The NZ Game Developers Survey 2024 is an independent survey of 100 games businesses conducted by Premium Research. Figures are as of 31 March 2024.Please contact info@nzgda.com with any queries