The Wellington Regional Skills Leadership Group’s November insights report said remote working enabled people and businesses to extend offshore more easily.
Capital investment in startups was beginning to dry up as rising interest rates increased risk and made other investment options more attractive, the report said.
“This softening could threaten future growth and innovation in this important sector of our region’s economy, with implications for local employment.”
Wellington Regional Skills Leadership Group co-chair Glenn Barclay said the report was a snapshot.
“It’s too early to draw any definite conclusions. We’ll be watching to see what happens over the coming months as to whether or not that is something that turns into a trend that we need to be really concerned about.”
Barclay stressed the group was not expecting a decline in the sector but potentially a slowing of growth if a trend did emerge.
There are 15,000 filled jobs in ICT occupations in the region, with most of those concentrated in Wellington City. About 3200 of these jobs relate to motion pictures.
Barclay said it was highly skilled and highly paid work.
“We’d like to have more of it, we’d like to have more people in Wellington like school leavers and others going into that sector, and we’d also like to attract people from outside the region to it.”
Digital Economy and Communications Minister David Clark said the Government was mindful of the situation in Australia. Photo / Mark Mitchell
PikPok chief financial officer Lance Burgess said Australian studios have started making attractive offers to the company’s workforce.
“They’re poaching and they are stripping out the senior level of our talent. These are the people who manage projects, who train other people, and it’s actually becoming a really big problem.”
About 180 people work in Wellington for PikPok- a company that’s known as a leading publisher of games across smartphones, tablets and desktops.
Burgess said better tax settings in Australia were forcing the industry as a whole to consider where they put their money.
“What’s happened in Australia is so compelling that a company like PikPok is millions of dollars better off if it were to do its business activity in Australia.”
Recent figures show New Zealand’s digital video games industry boosted revenue by almost 50 per cent to a record $407 million over the past year, employing more than 1000 people for the first time.
But Burgess said this year’s figures were the fruit of three years of building up the labour force and starting new projects, which were being put on the market now.
There was a lag between growth or lack of it, and following revenue, he said.
Burgess said he was concerned the sector would die in New Zealand.
“I don’t say it is a threat but it’s a business decision to work out where we get the best outcomes and apparently that’s not going to be New Zealand, even though we are New Zealand through and through - we’ve been here for 25 years.”
Digital Economy and Communications Minister David Clark said he has a constructive relationship with the New Zealand Game Developers Association and met with them regularly. (Burgess is also on the board of this association).
“The Government is mindful of the Australian Government’s recently announced support programmes for the gaming sector, and shorter-term measures, including those aimed at providing a competitive environment, are being explored.”
Officials will work through what support would most appropriately look like, remaining mindful of Australian competition, and will report back in due course, Clark said.
He also noted the Government’s recent announcement of $2.25m a year until 2027, to support the growth of local studios beyond a current centre in Dunedin, was well received by the industry.
