Podcast: The Detail

The meteoric rise of the gaming industry

The Detail today looks at why the government and University of Canterbury have put millions of dollars into a gaming lab - and the incredible figures the industry produces.

In the 2017-2018 financial year, revenue from New Zealand’s gaming industry jumped by 43 percent. That year, the sector brought in $143 million.

“Which pretty much makes it the fastest growing creative industry ion New Zealand, and even the fastest growing tech industry in New Zealand,” says Stephen Knightly, an Auckland based game developer who is also the secretary of the industry association.

“It employs about 500 people in full-time jobs, purely making entertainment related games, let alone all the app developers and virtual reality simulation developers who kind of spin off the industry.”

The global games industry is worth about $200 billion – “quite a lot larger than the film box office plus all their secondary revenue streams, and it’s larger than the music industry,” adds Knightly.

However, he says the industry flies under the radar despite its success, because the work was immediately sent off-shore.

“That’s the nature of a digital industry – it’s global from day one. I think very few people would be able to name a New Zealand made game.”

Despite the record growth, the gaming industry in New Zealand faces barriers to meeting its potential.

“Once you make a successful game, you can get sustainable quite quickly, if you get a fanbase going you can get that cashflow and some income coming in.

“The gap is having a good ‘beta’ product, or initial launch product.

“It’s really frustrating because we have investors knock on our doors, who say, ‘We see how big this industry is’ - but they want to see a prototype first… That’s the gap, the funding to create that early stage prototype.”

Knightly says the industry itself offers its fair-share of funding programmes to start ups, but the money is just not enough to produce functioning video games. Government programmes also exist to help the screen industries, to grow exports, and to develop high-tech intellectual property, but because gaming exists between the three areas, it misses out.

“We kind of fall frustratingly between the gaps. We get bits of support and goodwill from government, but I think there’s a role for early stage funding to come from government which would get us in front of investors and get us on the growth path.

“We’re hopeful that the Government is going to pay more attention to the gaming industry. Many ministers have visited game studios and seen us in action, but what I think people don’t appreciate it the scale of the opportunity.

“We are underperforming. We’re not achieving our potential. We have 0.8 percent market share.

“If the games industry in New Zealand had one extra significant hit, say one percent market share – that’s $250 million worth of exports.”

Want more from The Detail? Find past episodes here.

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