Industry experts warn booming billion-dollar gaming industry could be lost to enticing tax incentives overseas

Industry experts warn booming billion-dollar gaming industry could be lost to enticing tax incentives overseas
Photo credit: Getty Images

Industry experts have warned New Zealand could lose its booming billion-dollar gaming industry if we don't move fast.

Our digital technology industry is under threat, as our leading game developers are lured by hefty tax incentives and rebates from overseas. 

And the threat comes just as its success is being celebrated.

Where Tūhura Otago Museum would normally commemorate the past, it's stepping into the future, after transforming into an immersive and interactive game zone. 

The museum's marketing coordinator Charlie Buchan said the fact they were looking into digital and coding was exciting, "definitely stuff of the future".

The ACMI exhibition is breaking through the barriers of what's traditionally a male-dominated industry, because it's created solely by women. 

"This isn't something you'd normally see anywhere in the world. Being in an industry normally so dominated by men, women normally get flushed out so it's awesome to see their works showcased," Toni Hotea said.

Zoe Hobson from Dunedin-based game developer and publishing company Runaway Play said about 10 percent of game developers in the industry are women, but women make up nearly half of the actual gamers.

Runaway Play is sponsoring the exhibition, which has had good uptake since opening two days ago.

Museums commonly appeal to families, but the display of games has widened that net to include more teens, as well. 

The New Zealand Centre of Digital Excellence has poured resources into the expansion of our growing game development industry, enabling Dunedin to become a hotbed of talent. 

But that hard work could soon start to unravel. 

Newshub Nation's Digital Editor Finn Hogan says New Zealand was currently offering little support to our homegrown developers. 

This makes tax incentives further abroad appealing. 

If legislation is passed, Australia will offer a 30 percent Digital Games Tax Offset for eligible businesses that spend a minimum of $500,000 on qualifying Australian games expenditure. 

"We don't have a similar incentive here, so for studios set up here it's very attractive to relocate to Australia and take advantage," New Zealand Game Developers Association chairperson Chelsea Rapp said. 

Runaway Play is currently hiring in New Zealand, and while the company expands here, it's looking to also expand over there. 

"It's pretty hard to look next door at a 40 percent rebate and not investigate, so it's something we feel pressure that we need to do as a business, to be frank we'd rather stay here in New Zealand," Hobson said. 

"Australia is right there, so we are starting to lose some talent to Australia which is a real challenge for us in terms of hiring in New Zealand and retaining talent and I hope that's something we can counteract in New Zealand.

"Seeing how the code funding has impacted the growth of games in Dunedin, for me, just makes it clear how strong that incentive can be if we can roll it out nationally."

Globally the industry is worth over $250 billion, that's more than film and music combined.

"If we don't move on this space we're just gonna see other countries reaping the profits while we lag further and further behind," Hogan said. 

The Digital Economy and Communications Minister David Clark pointed to a new $155 million grant that could become available to those companies by September.

But, for some companies, September could be too long to wait.