New Zealand Aims to Surpass Wool as its Most Famous Export with Video Games

The New Zealand government recently unveiled a 20% tax rebate for game development studios as part of its 2023 budget. This move is expected to attract and retain gaming studios in the country, providing a long-term incentive for them to establish and grow their businesses. The rebate will be available to studios that meet the minimum expenditure threshold of NZ$250,000 per year, with individual studios eligible to receive up to NZ$3 million in rebate funding annually. The scheme will be backdated to April 1, 2023. Chelsea Rapp, chairperson of the New Zealand Game Developers Association, expressed her enthusiasm for the tax rebate, stating that it will help the country's gaming industry recover from the challenges posed by the neighboring Australian market. Rapp noted that many New Zealand studios were considering relocating to Australia due to its attractive tax breaks, which have led to a brain drain of senior talent in the industry. The introduction of the tax rebate is a significant development for New Zealand's gaming sector, which has experienced impressive growth over the past few years. In 2020, the industry's annual revenue more than doubled compared to 2018, and the NZGDA's 2022 annual report showed a 47% increase in revenue compared to the previous year, reaching NZ$407 million. The industry is now worth more than the country's wool industry, with an annual growth rate of 28-35%. Rapp emphasized the importance of addressing the incentive issue to retain local talent, citing the example of PikPok, a Wellington-based mobile studio that lost 15 senior staff members over the past year. The tax rebate is expected to encourage graduates to stay in New Zealand and contribute to the growth of the industry. New Zealand's unique experience during the pandemic, with a delayed lockdown and flexible working conditions, allowed the industry to adapt and learn from global trends. The country's collaborative environment and openness to innovation have also contributed to its growth. However, the industry still faces challenges, including the lack of mature startup investment ecosystems and the high costs associated with attending international expos. The Center of Digital Excellence, led by Vee Pendergrast and Tim Ponting, has created a tiered funding system to support early-stage startups, providing business mentorship and significant funding to lead to measurable outcomes. The NZGDA aims to build a thriving ecosystem, with all levels of businesses having the opportunity to thrive. The organization plans to expand its New Zealand Game Developers Conference and create a New Zealand screen festival to showcase the country's rich history in film development and the convergence of games and film.