It was great to hear news late last year that New Zealand game developers will receive an immediate funding boost from the Government to help support the growth of local studios.

We have previously written about the challenges faced by the local gaming industry, including a crippling skills shortage and a lack of Government subsidies (unlike in Australia, where the government has introduced a 30% federal tax incentive for video game developers, which sits alongside some existing State incentives of 10%). You can read more here.

Since then, data released by the New Zealand Game Developers Association (NZGDA) indicates that the local industry’s revenue grew in the 2022 financial year by 47% – increasing from $276 million to $407 million. This makes gaming New Zealand’s fastest growing export earner. And the number of people employed in the industry increased by 101 new jobs that year alone.

NZGDA chair, Chelsea Rapp, has been reported as saying that the industry could add another 300 jobs this year, but only if the Government takes measures to keep studios and local talent in the country. The NZGDA proposes that New Zealand itself introduce a 30% gaming and interactive digital media rebate – to level the playing field with Australia. Or, if that is not possible, extend eligibility for the New Zealand Screen Production Grant to include interactive media. It has long been a major challenge for the gaming industry that it must compete for talent against the local film industry, which receives tax breaks and subsidies.

So far, the Government has not agreed.

Increased CODE funding

However, it has recently announced that it will increase its funding for the CODE programme from $1 million each year to $2.25 million each year until 2027 – and extend the programme beyond Dunedin to other regions. CODE (Centre of Digital Excellence) was established in 2019 to offer grants to early stage gaming companies in Dunedin. It makes grants up to $250,000 – but they need to be matched by a studio’s own spending. The programme also makes specialised training and mentorship available to start-up game developers, which is an invaluable resource.

The local gaming industry has been calling for an expansion of the CODE programme, so this is great news – although the boost in funding is only modest and has been a long time coming.

Finally, at least, some recognition for a sector that contributes so much to New Zealand but has been in the shadow of other sectors. With a new Prime Minister and in an election year, we will be watching with interest to see whether the Government now makes screen grants available to the games sector – or matches the Australian tax incentive scheme – and how the lack of funding for emerging sectors like gaming is addressed in the different parties’ policies.

Beyond IP

We know that up-and-coming game studios and other IP-centric businesses need support to take innovation to the next level, which is why we are proud to be one of the few approved providers in Callaghan Innovation’s Beyond IP intangible asset management programme. We work with businesses who are accepted into the programme to help them build and implement an IP strategy that is tailored to their specific business needs – all with the financial support of Callaghan Innovation, which will fund up to 40% of a participant’s legal costs up to $10,000. This funding can be used to develop and execute an IP strategy, such as preparing corporate documentation for the relevant IP companies (e.g., shareholder agreements and capital raising related to the IP owning company), proposing a trade mark strategy, and drafting terms and conditions for end users of a game.

You can learn more about Beyond IP here, or feel free to contact Edwin Lim at edwin.lim@hgmlegal.com.