Game on

Why New Zealand could be a hub for video game development

Total Property - Issue 7 2017

It’s the billion-dollar industry where property needs can change from a garage to an office suite in just a few short weeks. And it’s one in which Kiwis are excelling.

New Zealand has become a hub for games development – and it has the potential to become a world leader.

Kiwi ingenuity is quietly dominating the gaming charts on mobile, PC and console and virtual reality (VR) platforms.

There are more than 500 fulltime professional game developers and artists in New Zealand – more game developers per capita than any country in the world – plus many more indie developers.

The industry’s official body, the New Zealand Game Developers Association, reports there are 29 studios operating across the country. Most are small-to-medium-sized outfits, employing fewer than 30 staff, although there are some major players that have a big international presence.

The three biggest studios are Grinding Gears, in West Auckland, PikPok in Wellington and Cerebral Fix in Christchurch. Together they employ about 250 people, and are responsible for some of the world’s biggest selling game titles including Path of Exile, Flick Kick Football Legends and Mini Metro.

New Zealand developers have also produced several top ranked mobile phone games, including Robot Unicorn Attack 2, MiniGolf Matchup, Bloons Tower Defence 5, Major Mayhem and Swing Racers, produced technology for gaming platforms such as Xbox, Nintendo and Oculus Rift.

The games industry generated $99.9 million in sales in the financial year ending March 2017, a seven percent increase on 2015, and a massive hike on 2012's revenue of $19.5 million.

The majority of New Zealand’s studios are locally owned and develop their own game concepts, which provides higher margins and more sustainable business than international service work.

The industry also has close ties with New Zealand’s Oscar-winning film and visual effects industry, with Weta Workshop, which provided the ground-breaking visual effects for The Hobbit, Lord of the Rings and Avatar, now creating games for leading augmented and virtual reality development company Magic Leap.

Also in New Zealand’s favour is that it is the cheapest native English-speaking location to make games, and ideally placed between US and Asia.

This has implications for the commercial property sector.

New Zealand Game Developers Association board-member and former chairman Stephen Knightly says: “The game development industry is flexible, highly creative and dynamic, and this is reflected in their work environments.

“Most studios prefer open-plan spaces in buildings with strong internet connections, good transport links and access to good coffee outlets. There is a war for talent, so studios that can offer good working environments will have an advantage.”

At the top of the development tree is Grinding Gears. The studio’s more than 100 artists and programmers are responsible for the massively popular multi-player, online, fantasy role-playing game Path of Exile, which is played by 14.2 million people around the world.

Grinding Gears operates out of a nondescript, 3,014m2 1980s office block located in the middle of a Pak‘nSave car park, in west Auckland.

It leases an entire floor, opting for an open plan work environment. It’s a step up on its two previous Auckland offices - 79m2 in a commercial unit surrounded by bushland in Titirangi and a garage in New Lynn.

Despite their success, Kiwi game developers are unlikely to pursue prestige offices in CBDs.

“Their customers are based all around the world and are unlikely to physically visit their offices,” Mr Knightly says.

Growth is the biggest factor influencing a gaming studio’s property choices. Most studios start off as one or two-person outfits but can expand quite rapidly once they find success.

Many of the smaller outfits seek to share space with other developers in coworking locations, such as The Arcade Auckland, in Auckland’s city fringe, and EPIC in central Christchurch.

The Arcade Auckland, which leases two 20m2 rooms in MVP Studio, an 592m2, Auckland Council-owned 1980s warehouse building, provides a space for developers to collaborate, solve-problems and get advice in a supportive environment.

EPIC in Christchurch is a 4,000m2 two-storey, black timber building on the corner of Tuam and Manchester streets that is home to more than a dozen tech companies, including leading development studios Cerebral Fix, Digital Confectioners and Stickmen Media, which also owns and operates Desolate Spectre Studios.

The project is based on the Silicon Valley model, where a building structure and use promotes innovation and has just recently opened an innovation hub in Westport. The satellite, which is also host to a branch of Cerebral Fix, offers 350m2 of open plan co-working spaces, fully serviced offices and meeting rooms in the city centre.

Studio chiefs believe that Sir Peter Jackson’s success in the effects and film industry is a clear indicator that building a world-leading industry in New Zealand is possible.

New Zealand Game Developers Association chairman James Everett says: “Our goal is to grow a billion-dollar industry in New Zealand within ten years. With some coordinated support and our export potential, that’s achievable. Finland’s game industry earned over $4 billion last year, for example.”

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