NZ Game Development Revenues Hit $100M
3 September 2017

New Zealand’s game developers earned $99.87M in the financial year ending 31 March 2017 according to an independent survey of New Zealand Game Developers Association studios. That’s double-digit growth of 12% in the last year, up from to $88.9m in FY2016.

“$100m is a great milestone to hit but our real goal is to grow a billion-dollar industry in New Zealand within ten years,” says New Zealand Game Developers Association Chairperson James Everett. “With some coordinated support and our export potential, that’s achievable. Finland’s game industry earned over $4 billion last year, for example.”

“Game Development is a mix of two of New Zealand’s strongest sectors, creative and hi-tech. In a global digital market, New Zealand creators have the same opportunity as anyone else to compete and succeed.”

“Much of our success to date comes from creating our own original creative IP and independently self-publishing it. While this cuts out the middlemen, it also means we must fund our own growth.”

55% of New Zealand’s studios describe themselves as independent self-publishers, 14% focus on contract work and outsourcing, while 28% mix contracting with developing their own original IP. Developing and publishing original game IP seems to be the most successful business strategy, with 65% of studios’ revenue coming from direct sales and 14% from selling advertising in those games. Contract work accounted for only 12% of revenues.

The industry’s already-strong export intensity increased further this year with 97% of revenue now coming from offshore, up from 93% last year. Hit New Zealand-made game Path of Exile was recently launched in China by Tencent, the world’s largest games publisher. Tencent have also invested in Dunedin-based studio Rocketwerkz, founded by successful game designer Dean Hall. Indie games Grabity and Sky Noon have been selected to showcase at the influential PAX Australia Expo in Melbourne in October.

The overall interactive games industry in New Zealand is now worth more than half a billion dollars. In addition to developing and exporting video games, New Zealanders spent $125 million in retail stores on games and $299 million on digital and mobile gaming during 2016 according to figures from the Interactive Games Entertainment Association. The combined value of export earnings and the local market totals $524m.

As of March 2017 there were 500 professional game developers employed by studios in New Zealand, working in a mix of creative and technical roles. 29% of employees are programmers, 28% are artists, 18% are in marketing or management, 9% are game designers, 7% work in quality assurance and 6% are producers. Future job growth looks positive with the studios expecting to employ another 93 people in the coming year and the Association’s job board has been busy with 58 job vacancies published in the last year.

However, 42% of studios felt that skills shortages were constraining the growth of their business. Other barriers to growth identified were difficulties attracting early stage funding, attracting expansion capital, developing business capability and increasing employee diversity. Similar to the ICT sector, 17% of employees in the game development industry are female.

“At the moment, R&D funding is the most pressing need facing the sector. It’s what is needed to develop more original creative IP for export. Currently there’s a lack of coordination with the rest of NZ’s screen sector which can lead to missed opportunities too,” says Everett.

The data comes from a survey of 29 New Zealand Game Developers Association studio members conducted by independent researchers Tim Thorpe Consulting Limited.