NZ game development revenue hits $100m

The New Zealand video game industry has has earned a record $100 million in annual revenue.  Photo: Reuters
The New Zealand video game industry has has earned a record $100 million in annual revenue. Photo: Reuters

New Zealand game developers have posted a new high score - earning a record $100 million in annual revenue.

An independent survey of New Zealand Game Developers Association studios showed growth of 12% in the year ended March on the previous year's $88.9m.

Association board member Stephen Knightly said $100m was a "nice round number" but was more smitten with the double-digit growth in an industry which includes computer, console and smartphone games.

Mr Knightly said the New Zealand market had proven that game development is not just a "hit" driven business, where big games sell large amounts of copies, but rather, it suceeds well as a "games-as-a-service" model.

The prime example is Kiwi break out action, role playing game game Path of Exile. The game, which first launched in 2013, has just launched in China and on Xbox One worldwide. Path of Exile is free to play, but offers purchases for in-game content.

Mr Knightly said Grinding Gear Games, the studio behind Path of Exile, had consistently worked on the game, fixing problems and providing expansions since it was launched which has kept players engaged.

Grinding Gear Games partnered with the world's largest game publisher, Tencent, in China for the launch.

Grinding Gear Games managing director Chris Wilson said the launches occurred in the same month as the release of their largest content update. Mr Wilson said before launching in China and on Xbox One, the company hit of a record of 143,000 players playing the game simultaneously.

"With these strong releases behind us, we'll keep growing Path of Exile over the next decade, releasing four updates per year to keep driving its growth."

The company was lucky to have Tencent as a publishing partner in Mainland China, he said.

"They are a powerful company and are very experienced at publishing games like Path of Exile in their region. We have have been working together for a couple of years now and are very pleased with the relationship. I have had a deep respect for Tencent for many years, so it's great to get to work together on this project."

Tencent has also partnered with Dunedin-based studio Rocketwerkz, founded by development wunderkind Dean Hall, which was behind the popular survival game DayZ.

China overtook the US to become the world's largest gaming market last year, spurred by it's 600 million gamers, generating $34.3b of the industry's $101.1b global market value over 2016.

Another example of revenue growth cited by Mr Knightly was by Wellington-based mobile game developer Pik Pok, which has a suite of more than 30 games on Android and IOS which allows them to draw passive income from older releases.

Entering international markets is a no-brainer for local developers, with 97% of the revenue for New Zealand developers coming from overseas this year, which Mr Knightly said showed the appetite of gamers to seek out new experiences worldwide.

Association chairman James Everett said $100m was great, but the real goal was to grow toward a billion-dollar industry within 10 years.

"With some coordinated support to maximise our export potential, that's achievable," Mr Everett said.

"Finland's game industry earned over $4b last year, for example."

Mr Everett said the main thing holding the sector back was a lack of R&D funding.

"[It's] the most pressing need facing the sector. It's what is needed to develop more original creative IP [intellectual property] for export."

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