Chantelle Cole: NZ on Air's Director of Game Development Sector Rebate on studio revenue increasing 17% in the year to July

Video games are raking in the cash and keeping people employed.  

NZ on Air-funded studios brought in $829 million in the year to July – 17% more revenue than last year.  

Those studios also have more than a thousand full-time employees.  

Director of the Game Development Sector Rebate at New Zealand on Air, Chantelle Cole says we're punching above our weight, with the global average being a 9% increase in revenue. 

She told Mike Hosking the 17% figure is just from the 43 studios that go through their programme – the New Zealand video game industry is actually 200 studios strong. 

Cole believes that when the New Zealand Game Developers Association releases their revenue figures in September, their growth may hit 30%, or even 40%. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Now, for all your dairy and farming exports success, let
us not forget the tech sector and they're booming. So
tech within tech is gaming. The gaming industry new stats
yesterday revenues up seventeen percent to a record eight hundred
and twenty nine million. Ninety eight percent of that, of
course is offshore, so they're now on track the head
of billion, two years ahead of schedule. Chantel Coal is
with New Zealand on air Chintel, good morning, good morning, right,

(00:22):
And people who don't follow this should should know your job,
which is the director of Game Development Sector rebate. So
are the rebates clipped? From my reading, the rebates clearly work.

Speaker 2 (00:32):
Yes, I think even if we just look at the
track credit card of New Zealand game development, it took
around sort of twenty years for our game developers to
reach a revenue about four hundred million. Then Australia introduced
a really competitive tax rebate and we started to see
a big brain drain over the ditch to Australia and
a lot of our really estab the studios starting to
look to move offshore. So the New Zealand Game Development

(00:56):
Sector Rebate was introduced and up and running in twenty
twenty three and with in three years with more than
double that revenue. And for context, the revenue figures that
came out yesterday are just from forty three studios that
go through our program, but the industry is actually two
hundred studios strong. So when the figures come out in
September from the New Zealand Game Developers Association, I think

(01:16):
we'll see that their growth hit maybe thirty even forty percent.

Speaker 1 (01:20):
Is the rebate stable because this is movies and Lord
of the Rings all over again. Is there a race
to the bottom that we go at X and then
Australia goes at wy and then we go at Y plus.

Speaker 2 (01:30):
No, because I mean ours is actually at quite a
lower rate than theres is about thirty percent plus an
additional ten percent from a lot of federal states outsets
at twenty percent. And what it does that's different from
theirs is it actually rewards development activity. So what most
people don't realize is that it actually takes about two
to four years to make a game before you'll receive

(01:51):
the profits of that activity. So there's quite a lot
of time spent paying for staff, rent all of the
tech needed for these sorts of endeavors, and so there's
essentially the rebate's there to help give a little bit
more stability so that they can hire more specialized roles
and release a more polished product out of the door.

(02:11):
And we can see that with this rapid revenue growth,
by having a bit more stability during development, they're actually
able to do better at the other end. For New Zealand, do.

Speaker 1 (02:20):
They get to double dip, triple dip whatever I mean?
Is there a cutoff point where you go, you're too successful,
now you've made too many games, making too much money,
go away.

Speaker 2 (02:28):
No, they don't get to double dip. So if they
have got a grant from somewhere else in the New
Zealand government sector, we deduct that from their rebate amount
and essentially what we are really doing is encouraging that
R and D, that investment in new products and encouraging
them to invest in their teams. And it's actually what
we're seeing this year. We did a new bit of

(02:49):
data analysis and we looked at the average growth rate
of staff per studio and it's actually fourteen percent. So
are reinvesting a lot of their rebate into hiring staff.

Speaker 1 (02:59):
That's encourage so you're bullish on this is this I
don't know. This is in new wheelhouse. Are they beyond
the is the gaming industry beyond the economic cycle? In
other words, you know, they just carry on and do
their thing and there's a growth path there and it
doesn't matter what's happening in the rest of the country.

Speaker 2 (03:15):
That is a good question. I think they are their
own little ecosystem. But that being said, all industries can
be impacted by the economy and buy what's happening around
the world, and we do see that sometime in games.
But what makes them special, I think is the fact
that eighty five percent of them are developing original ip
and so they're not competing with each other, and that

(03:36):
means that they actually really support each other. They all
share network connections with say Apple, Google, different countries around
the world who have developers we can learn from, and
they share their learnings. They're really generous with each other,
and I think that's why over time they've built this
resilience that we're not always seeing in games industries in
other countries.

Speaker 1 (03:56):
Nice and right, well done, shouldn't tell you have a
good week In Shindt Tell Kulf, director of Game Development Sector,
about for New Zealand on air. For more from the
mic Asking Breakfast, listen live to News Talks at B
from six am weekdays, or follow the podcast on iHeartRadio