The gaming sector within New Zealand has experienced a remarkable surge in recent years. It has experienced rapid development thanks to talented developers, emerging startups, and a nurturing environment. The growth can be attributed to factors such as the increasing presence of iGaming, the popularity of esports, and the nation’s focus on fostering creativity and innovation. Government backing has been instrumental in fueling the industry’s expansion. This article will explore the factors and support driving the advancement of New Zealand’s gaming sector.
Understanding New Zealand’s Gaming Sector
The gaming industry in New Zealand falls under the umbrella of information and communication technology (ICT), which ranks as the country’s largest export sector, generating over $8.7 billion in annual revenue. As reported by the New Zealand Game Developers Association, the sector experienced a revenue surge to $407 million per year almost doubling within a year. Gaming and networked entertainment stand out as areas for growth within the ICT industry landscape. There is a prevailing belief that the gaming sector in New Zealand holds potential, attracting increased attention from investors who view it as undervalued. Beyond console and PC gaming this industry branches out into applications such as education, fitness, and medical training.
Additionally, the online gaming or iGaming sector in New Zealand is rapidly expanding, with online casinos playing a role in driving this momentum. Sam Barnard, Techopedia’s editor-in-chief states that the New Zealand Gambling Act of 2003 prohibits remote gambling activities. Barnard points out that even though there are no online gambling sites licenced in New Zealand, authorities do not have issues with offshore casinos that are among the top ranked for 2024.
Despite restrictions on gambling in the country, reports suggest that around 80% of New Zealanders have engaged in online casino activities, indicating a sizable and engaged player base. The global projection for the online iGaming market anticipates reaching $321 billion by 2026, signaling growth trends ahead. New Zealand is well placed to take advantage of this market.
Growth Projections
The gaming sector in New Zealand holds promising prospects for growth in terms of both gains and job opportunities, buoyed by government backing and a sizable gaming community. There is a sense of anticipation for industry expansion in the near future. Projections indicate that New Zealand’s gaming industry is set to achieve NZ$1 billion in exports by 2025 while the global market witnessed a 20% surge to around NZ$180 billion a year. In the year ending March 2023, revenue in the New Zealand gaming sector rose by 7%, hitting NZ$ 434.4 million ($270.9 million).
Chelsea Rapp, Chairperson of the New Zealand Game Developers Association (NZGDA) foresees progress in the sector pointing to government funding initiatives like the $40 million allotment for the Game Development Sector Rebate. She highlights that gaming transcends platforms like consoles and PCs, with a majority of New Zealanders identifying as gamers.
By comparison, Finland boasts a gaming industry value of $5 billion showcasing room, for substantial growth compared to New Zealand’s current $400 million industry stature. Forecasts suggest that the country’s gaming domain is poised to experience a compound growth rate of 6.57% from 2022 to 2027 reaching $480.5 million by the end of this period.
iGaming Growth
The iGaming industry in New Zealand has seen growth driven by the expansion of platforms and increased acceptance among the public. This is attributed to the convenience of platforms, a variety of gaming options, and the immersive experience offered by casinos and betting sites.
Despite the restrictions set by the Gambling Act of 2003, projections indicate that market revenue is set to hit US$0.64 billion by 2024 and is expected to grow at a rate of 6.09% until 2029 reaching US$0.86 billion that year. With developments like crypto gaming and the metaverse entering the online casino scene, more players and investments are likely to flow in from New Zealand, signaling positive prospects for the industry’s future in the country. With a growing player base and rapid global expansion trends, there’s potential for this sector to become an economic driver for New Zealand in the coming years.
Rise of Crypto Gaming and the Metaverse
The growth of the iGaming industry is also influenced by the rise in popularity of crypto and blockchain gaming platforms. This includes crypto casinos and a variety of crypto gaming apps. Companies like Easy Crypto, which facilitates cryptocurrency transactions, are becoming major players in the country. Similarly, businesses such as Veve are focused on developing NFT-based gaming and entertainment platforms.
NFT games present an investment opportunity using technology to offer players unique and engaging experiences with various benefits. As NFT games gain traction, the value of in-game tokens and NFTs is expected to increase. New Zealand’s blockchain game developers have experienced increased revenue from markets, suggesting potential for the country to expand its export opportunities through technologies akin to those seen in NFT gaming.
Government Support and Incentives
The New Zealand government has recognized the potential of the gaming industry and has taken steps to support its growth. One such initiative is the Game Development Sector Rebate (GDSR) Scheme, which allocates $40 million annually to aid game developers and studios. The key features of the program include:
- Game development studios meeting criteria can receive a 20% reimbursement, on approved expenses up to a maximum of $3 million per studio per year.
- To be eligible for the rebate, studios must spend a minimum of $250,000 annually.
- NZ On Air is responsible for managing the rebate program.
The government has chosen to maintain the 20% tax incentive for game developers while also introducing the GDSR program. This comes following the October 2023 election, despite encountering resistance from several groups.
Acknowledging the gaming sector as an area for expansion and employment opportunities in New Zealand, the government labeled it as ” underestimated.” Ministers have expressed their backing for the industry demonstrating a dedication from ranking officials.
Additionally, the government is actively promoting New Zealand as a center for game development, attracting talent from all over the globe. The favorable business environment, established infrastructure, and high quality of life in New Zealand have made it an appealing destination for game developers worldwide.
Factors Driving Growth of the Gaming Industry
There are several key factors that are driving the growth of the gaming industry in New Zealand:
- The increase in usage: The increase in the use of platforms has played a significant role in driving the growth of the online gaming industry in New Zealand.
- Rise in mobile gaming: There has been an increase in mobile gaming, which has contributed to the expansion of the online gaming sector.
- Ease of access and convenience: The ease of accessibility and convenience of online gambling, like esports betting, and video gaming have sparked growth and transformation within New Zealand’s online gaming scene.
- Variety of options and personalized experiences: The online gaming industry in the country has advanced to offer a broader range of options and tailored gaming experiences for players.
- Collaboration between local and international companies: Partnerships between technology firms and global online gaming operators have led to the creation of gaming products and platforms customized for the New Zealand market.
- Expanding player community: According to NZD GA, there is an expanding, diverse, and engaged gamer demographic in New Zealand, spanning a wide range of ages, genders, and gaming preferences
- Economic influence and employment opportunities: The impact of the gaming industry on the country’s economy is significant, contributing to GDP growth, tax revenues, and job creation opportunities.
Leveraging Emerging Technologies
Technology has played a pivotal role in shaping the gaming industry in New Zealand. The advancements in hardware and software have allowed gaming developers to create more immersive and realistic gaming experiences. The introduction of virtual reality (VR) and augmented reality (AR) has revolutionized the way gamers have been interacting with various video and casino games, providing a new level of immersion and interactivity and the significant potential in New Zealand’s gaming industry.
The chairperson of the NZ Game Developers Association, Chelsea Rapp, notes that these technologies “found their initial impetus in the video game sector” and that you are now “starting to see greater application of those technologies in non-game spaces.” This suggests AR and VR technologies that were first developed for gaming are now being applied in other industries as well, highlighting the innovative role of the gaming sector.
New Zealand’s gaming industry has significant potential to create more immersive and engaging gaming experiences. There has been a rise in esports and how technologies like augmented and virtual reality found their initial passion in the video and casino game sector. This highlights that New Zealand game developers are well-positioned to leverage these emerging technologies to develop a highly immersive and interactive gaming experiences. With 4 out of 5 New Zealanders describing themselves as gamers, there is a strong domestic market and talent pool to support the creation of these types of experiences.
