There is growing concern that gaming companies are already either in the process of relocating some or all of their operations to Australia or contemplating the same following the introduction of tax breaks aimed at growing the industry.
Last year, the Australian Government announced a A$1.2 billion package to boost the gaming industry, which included a 30% federal tax break dubbed the Digital Games Tax Offset, whose eligibility starts from 1 July 2022. This alongside some states like New South Wales, Victoria and Queensland also offering a 10% rebate mean that New Zealand gaming companies that set up shop there can enjoy an up to 40% tax break.
A survey done in December 2021 found that more than half of the gaming studios in New Zealand were already considering a move to Australia. The sector is considered high growth having recorded earnings of about $276 million and having employed just under 1,000 people in 2021. This compared to just over 1,300 new job entrants in Australia. Industry estimates indicate NZ export revenue from the sector could grow to $1 billion by 2025 if the current trajectory is maintained and there is no talent exodus.
According to New Zealand Game Developers Association (NZGDA) chair, Chelsea Rapp, several companies were already either shifting their operations to Australia or assessing such a move. This includes Runaway Play and RocketWertz.
Runaway Play’s chief executive, Zoe Robson, confirmed that while the company was not closing their operations in Dunedin, they were considering if future growth should happen locally or in Australia. She added that the company had already lost some staff to Australia since the tax breaks were announced and that the country would likely lose both talent and intellectual property if the government did not act fast to support the industry.
RocketWertz founder Dean Hall has confirmed that the company was already looking into two possible locations for a new studio in Australia where they would employ 50 people. Lower Hutt studio A44 games has already set up shop in Melbourne, with StaplesVR also making plans to relocate.
Rapp noted that Australia appeared to understand the growth potential of interactive media and that the NZ government needed to fast-track proposals in its Digital technology Industry Transformation Plan in response.
She said that the country could afford a lower 30% rebate and should complement this with an industry development scheme for training and start-ups. This she stated would give the industry a strong foundation and allow it to compete long term. With a 30% rebate, the industry can be expected to add 300 new tech jobs by 2025.
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