Government gives video game industry cash injection - but National wants more as Australia lures talent

The Government is boosting New Zealand's video game industry with an annual cash injection to support local talent.

The industry generated $407 million in revenue in the past year - with plans to hit the $1 billion mark within 10 years.

But that growth is under threat as Australian tax incentives lure developers across the ditch.

Atawhai Interactive is a success story born out of the Centre of Digital Excellence - better known as CODE.

"It's really created the company and the opportunity for this to be a commercial product as opposed to a hobby project developed by friends," said software engineer Mickey Treadwell.

CODE has been fostering a game development ecosystem in Dunedin for the past three years - and now the programme will be downloaded nationwide.

"There'll be hubs set up in the North Island, in the lower North Island and the upper North Island, similar to what we've got set up in Dunedin," said Digital Economy and Communications Minister Dr David Clark.

The Government's investing $2.25 million per year till 2027 to expand the CODE programme, replicating the success of CODE in Dunedin on a much larger scale.

"The most recent NZGDA (New Zealand Game Developers Association) survey shows that Otago studios now represent 26 percent of the total number of studios in the country," said CODE CEO Tim Ponting.

But local studios are being lured across the Tasman by Australian government agencies offering incentives to New Zealand companies to create jobs in Australia rather than here.

National's Nicola Willis believes New Zealand should do the same.

"Australia has been rolling out the welcome mat, we've been putting out the stop sign," she said.

"It's time for us to realise that when we allow talented people into New Zealand they then grow the skills of New Zealanders and contribute greatly to our communities."

Dr Clark said the Government is working on a counter strategy.

"It's something that's been a threat for well over a year now and we've seen the industry continue to grow here but we should never be complacent."

But money talks and this latest funding boost shows that the Government has entered the chat.