Computer game exports double to $200m, but industry leader has a beef

A still from Path of Exile, created by Chris Wilson's Grinding Gear Games. Image / Supplied

The government is touting the fast growth of the computer gaming industry, but the founder of one the largest startups in the sector says it faces an uneven playing field.

Phil Twyford - who now has both computer games and aerospace under his purview as Economic Development Minister - promoted a new survey by the NZ Game Developers Association that said the "interactive media" sector grew 42 per cent to $203.4 million in 2019, with 96 per cent of that total coming from exports.

Over the past two years, the local computer gaming industry has doubled in size, thanks to major overseas investment in development shops like Auckland's Grinding Gear Games (in which China's Tencent bought a majority stake for more than $100m) and the fast-growing number two contender RocketWerkz, based in Dunedin, which also attracted major funding from Tencent.

Economic Development Minister Phil Twyford sees local game development becoming a $1 billion industry by 2025. Photo / Dean Purcell

Twyford said computer game development is on track to becoming a billion-dollar industry in 2025.

"It's exciting to see the government recognise the potential of our industry," RocketWerkz founder Dean Hall told the Herald this morning, shortly after Twyford's statement.

"The faster we get to a billion dollars the faster we can tax that billion dollars," he said.

"It's going to take more than press releases, though.

RocketWerkz' Dean Hall complains of an uneven playing field. Game developers and compete with the likes of Weta Digital for staff, but only the film industry is eligible for funding. Photo / file

"A good start would be levelling the playing field with film. The NZSPG [New Zealand Screen Production Grant] specifically excludes games and is directly subsidising film - when we compete for the same people."

Grinding Gear Games, RocketWerkz and other game developers often poach staff from the likes of Weta Digital in the movie special world, or vice versa.

"The industry moves fast and government needs to move fast with it," Hall said.

The NZGDA has long lobbied for the computer game industry to be eligible for creative arts funding.

Earlier this week, a senior NZGDA figure said he was hoping Twyford would have news on that front today.

It wasn't to be.

However, Twyford told the Herald that a policy change was possible later this year.

"That will be looked at in the Creative Industries ITP [Industry Transformation Programme]. Work will begin on that later this year." MBIE will carry out the assessment.

In the meantime, Twyford said, "We are also helping the industry directly address its skill shortages through our reform of vocational education. The game development industry will for the first time be able to influence training and the type of courses offered by vocational education providers through the formation of new Work Development Councils."

Twyford said interactive media was the kind of low-emission, export-generating, highly scalable and created high-value jobs. It was just the sort of industry his government wanted to foster.

Grinding Gear Games co-founder Chris Wilson. His West Auckland company, now backed by a $100m investment from China's Tencent, employs 150 in West Auckland. Photo / Dean Purcell

"Whether it's through game development, digital story-telling, augmented reality, education technology or health applications, interactive media has so many social, wellbeing and cultural benefits to offer New Zealanders and people around the world," he said.

The minister said Grinding Gear Games, based in his electorate of Te Atatu, was a signature example. The company, founded by Chris Wilson, had 114 staff when Tencent took its majority stake for $100m+. It now employees around 150 and some two million people worldwide play its Path of Exile role-playing game - which is huge in China (and one business that won't suffer from the coronavirus. If you're quarantined indoors, why not while away your time buying magic armour?).

Hall founded RocketWerkz after five years in the Air Force plus a successful stint in the gaming industry in Europe. He returned to New Zealand in 2015 to found his own gaming studio and now employs 50 people in Dunedin.

Late last year, Hall opened a second studio in Auckland, and went on a hunt to hire 60 new staff to create a big-budget survival game.

Hall said today, "We are at 40 people full-time now in Auckland. It really feels like this is my best work. I've never been more excited about a project."

NZGDA chairwomen Cassandra Gray saluted the work of the likes of Hall and Wilson, but also noted, "The 10 largest studios earned 93 per cent of the industry revenue, employed 77 per cent of the workforce and are now 10 years old on average.

NZ Game Developers Association chair Cassandra Gray says a worsening skills shortage and access to venture capital ar the industry's two biggest challenges. Photo / File

"Our opportunity is to support the next generation of creative tech companies to join them."

An NZGDA survey found some 47 per cent of members said that skills shortages were limiting the growth of their business - an increase on last year when 24 per cent of studios said they were feeling the skills shortage pinch.

Attracting early stage development funding and attracting investment for expansion continue to be the biggest growth challenges to the industry, Gray said.

But like Hall, she'll have to wait until later this year to find out if NZSPG funding will be available to help plug the gap.