Latest / Best of Business / Joy Keene: NZ Game Developers Association executive director on New Zealand's 'booming' video game industry

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Joy Keene: NZ Game Developers Association executive director on New Zealand's 'booming' video game industry · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed Be
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  Speaker 2: So our video game industry is booming. It's been announced
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  Speaker 2: the sector has hit its one billion dollar revenue target
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  Speaker 2: two years ahead of schedule. Not only that, but it's
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  Speaker 2: on track to double that by the end of the decade.
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  Speaker 2: New Zealand Game Developers Association Executive director Joy Keen is
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  Speaker 2: with me now. Good morning, Joy, Good morning Francesca. Talk
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  Speaker 2: me through the success of the industry in New Zealand.
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  Speaker 2: What has led to hitting this target two years early.
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  Speaker 3: There's actually quite a few different factors that are behind this.
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  Speaker 3: And if we take a look back at the industry
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  Speaker 3: just even six years ago, in twenty twenty, we were
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  Speaker 3: turning over or bringing in two hundred and seventy one
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  Speaker 3: million dollars worth of revenue a year, and now obviously
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  Speaker 3: that's been supercharged. We're a very creative country. Obviously we
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  Speaker 3: have some number eight wire kind of thinking, and couple
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  Speaker 3: that with the government support that we've been receiving over
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  Speaker 3: the last few years that has supercharged what our game
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  Speaker 3: developer's been able to do. And those three factors, the
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  Speaker 3: creativity the number eight wire thinking and that government support
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  Speaker 3: have really really put us on a huge growth trajectory,
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  Speaker 3: and that growth isn't going to slow down. We see
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  Speaker 3: that continuing in the next few years.
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  Speaker 2: Because even if we look at last year's revenue, that
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  Speaker 2: was seven hundred and fifty nine million, So it's just
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  Speaker 2: a big increase in just a year, isn't it?
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  Speaker 3: It is? It is. It's absolutely huge, and that actually
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  Speaker 3: reflects the previous year because the previous year twenty twenty
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  Speaker 3: four was five hundred and forty eight, So we've gone
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  Speaker 3: five forty eight, seven hundred and fifty nine, and now
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  Speaker 3: we've hit that billion dollar target. So the growth is huge,
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  Speaker 3: but it's also quite stable.
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  Speaker 2: How vital is that government support to keep growing the
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  Speaker 2: sector absolutely vital.
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  Speaker 3: Without that support, we can't re envy into the studios.
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  Speaker 3: So typically when a game is released, studios will obviously
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  Speaker 3: release it and they have what's called a growth spike.
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  Speaker 3: So generally within the first six months a studio will
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  Speaker 3: earn eighty percent of that game's entire revenue. Okay, so
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  Speaker 3: what happens is the revenue starts to spike off. Now,
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  Speaker 3: without the revenue to continue operating, studios face quite a
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  Speaker 3: quite a tough time. So the fact that the government
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  Speaker 3: support has been able to be reinvested back into the
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  Speaker 3: studios allows them to continue growing, covering their expenses and
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  Speaker 3: generating more money with future game releases. And the benefit
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  Speaker 3: to New Zealand for this is the fact that the
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  Speaker 3: game development sector obviously earning one billion dollars is great,
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  Speaker 3: but it's also returning about two hundred million dollars in
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  Speaker 3: taxes which are all paid here in New Zealand.
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  Speaker 2: Which sounds very good. So anyone who's saying, well, go
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  Speaker 2: if you've got If the industry is thriving the way
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  Speaker 2: it is, surely you don't need the rebates and the
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  Speaker 2: grants and things, you would argue, No, if we want
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  Speaker 2: to keep growing this industry as you do, we need
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  Speaker 2: to keep those.
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  Speaker 3: In place exactly correct, exactly they need to stay there
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  Speaker 3: so that we can continue and enjoying this you know,
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  Speaker 3: this success.
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  Speaker 2: Yeah, Who are the big players in the sector. Where
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  Speaker 2: is most of the income coming from.
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  Speaker 3: We have about half a dozen studios around New Zealand
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  Speaker 3: who are generating a good chunk of that one billion dollars.
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  Speaker 3: There are two games that have been released out of
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  Speaker 3: New Zealand on the Roadblocks platform, which are doing incredibly well.
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  Speaker 3: We have studios like Pitt Pock who have a suite
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  Speaker 3: of games and in fact they've just hit over five
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  Speaker 3: hundred million downloads of all their games. We have growning
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  Speaker 3: Gear Games in Auckland who are the authors of Path
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  Speaker 3: of Exile and Path of Exile Too, which has also
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  Speaker 3: done very very well. We also have Rocket Works in
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  Speaker 3: Auckland who are a large studio and doing fantastically well
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  Speaker 3: as well. But it's not just the big studios, it's
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  Speaker 3: smaller studios as well, what we call indie studios or
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  Speaker 3: independent studios that are making knockout hits and are getting
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  Speaker 3: some amazing support through Code, which is a government funded
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  Speaker 3: development agency who essentially hands hold handholds sorry studios, takes
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  Speaker 3: them through the initial growth phase, help them fine tune
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  Speaker 3: their product, helps them pitch to investors overseas, and helps
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  Speaker 3: them get their game launched. And a lot of success
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  Speaker 3: we're seeing is actually coming out of that program directly.
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  Speaker 3: Breakout hits like a game called Abiotic Factor from Deep
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  Speaker 3: Field Games is one of Code's very first success stories
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  Speaker 3: and that's still earning a lot a lot of money,
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  Speaker 3: has a huge amount of downloads JAUI.
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  Speaker 2: How many games do you produce to get the breakout them?
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  Speaker 2: Does that break out it come along?
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  Speaker 3: Well, if you'd ask me that maybe three or four
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  Speaker 3: years ago, i'd say, you know, it's something very special.
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  Speaker 3: But we're seeing it happen more and more in New
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  Speaker 3: Zealand because of the support you know, the Code Program,
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  Speaker 3: for example, it's timely and it's targeted. It's not just
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  Speaker 3: throwing money and going hey, guys, go and do this.
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  Speaker 3: They're receiving a lot of support, and it's a lot
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  Speaker 3: of very well educated support by very experienced veterans from
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  Speaker 3: the industry. And so what we're seeing is those games
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  Speaker 3: that have the careful nuturing are becoming hits more and
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  Speaker 3: more often. So if you're an independent developer by yourself,
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  Speaker 3: it might take a lot longer to get that hit success,
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  Speaker 3: but through the Code Program, we're seeing that happen more
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  Speaker 3: and more often.
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  Speaker 2: Good to hear, But in.
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  Speaker 3: Saying that, you know, one of the one of the
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  Speaker 3: successful games that's out there at the moment, it's one developer.
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  Speaker 3: It's one developer who had a great idea and executed
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  Speaker 3: their very very well.
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  Speaker 2: So yeah, so Joid, this kind of growth, Is it sustainable?
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  Speaker 2: Is it going to help keep our talent in New Zealand,
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  Speaker 2: because I know that there had been talking the past
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  Speaker 2: of people potentially needed to go offshore to make it
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  Speaker 2: in the sector.
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  Speaker 3: Yeah, that's exactly right, and that's one of the reasons
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  Speaker 3: why the Game Development Sector Rebate was brought in by
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  Speaker 3: the Labor Government in twenty twenty three was to help
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  Speaker 3: studios increase wages to keep the talent here in New Zealand,
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  Speaker 3: and that's definitely working. We saw back in twenty twenty
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  Speaker 3: two about eighty percent of the industry we're looking at
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  Speaker 3: going off offshore, and after the implementation of the GDSR
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  Speaker 3: that dropped down to a round twelve percent. So that
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  Speaker 3: speaks volumes that with the right kind of pay settings
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  Speaker 3: here in New Zealand, the right kind of support, we've
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  Speaker 3: been able to retain that talent. Our next challenge is
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  Speaker 3: around pathways into the industry and making sure that our
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  Speaker 3: young students coming out of high school and university have
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  Speaker 3: the right tools and the right guidance to be able
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  Speaker 3: to develop games in a professional way to make sure
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  Speaker 3: that this industry keeps going.
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  Speaker 2: So now that you've hit this target, what's the next one.
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  Speaker 3: Oh, it's two billion, of of course, and we you know,
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  Speaker 3: looking into the future, looking at the potential the industry has,
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  Speaker 3: we can see that happening within the next three to
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  Speaker 3: five years.
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  Speaker 2: Amazing, Joy, really nice to talk to you. Thank you
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  Speaker 2: for starting our Sunday Morning off with the good news story.
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  Speaker 2: The industry is also celebrating another milestone with the combined creative,
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  Speaker 2: digital and tech sectors. They're likely exceeding the primary sector
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  Speaker 2: for GDP contribution in New Zealand for the first time
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  Speaker 2: as well. So it's a very good story.
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