By Pattrick Smellie
Aug. 19 (BusinessDesk) - The government will look "very seriously" at recommendations from the New Zealand digital gaming industry for the establishment of a new NZ Games Investment Fund and associated NZ Interactive Commission, says Economic Development Minister Phil Twyford.
Launching 'Interactive Aotearoa', a joint industry and government-funded report into the potential of the fast-growing sector, at the offices of Wellington digital games developer PikPok, Twyford was unwilling to put a timetable or define process for dealing with the recommendations, but said the report provided "raw material for us to look at as part of the new industry transformation plan for the creative industries".
"It's a bit early," said Twyford when asked whether funding or commission announcements could come in next year's pre-election Budget. "I don't want to rule in or rule out whether we're going to spend money on this or that but I say this: the practical ideas in this report are exactly the kind of thing we need to be looking at. Countries like Finland have specific policies to grow this industry and they've had spectacular results."
Finnish game-makers are perhaps best known for the creation of the 'Angry Birds' game, which was a runaway worldwide hit in 2010 and was developed under a policy in place in Finland since 2008 which supports the digital gaming sector through that country's equivalent of New Zealand's Callaghan Innovation.
ITPs are planned initially in four sectors: agricultural technology, food and beverages, digital technology, and forestry and wood. The draft agri-tech plan was announced last month.
The New Zealand industry is embryonic by comparison, generating total revenues of $143 million in 2018 for a global sector with annual revenues of $258 billion, according to the New Zealand Game Developers' Association. However, with compound annual growth rates over the last six years of 39 percent and 93 percent of its revenue earned as exports, the sector shows substantial potential for growth and could become "a billion dollar a year industry", said Twyford.
As well as pure entertainment, interactive gaming is increasingly used for education, training and business applications using virtual and augmented reality.
"Currently, no government agency has a remit to monitor or support the interactive or creative tech sectors," the report says.
While such a commission could be modelled on the NZ Music Commission, "an industry-led private trust with government funding", or the NZ Film Commission, which combines economic and cultural goals, the digital gaming sector has "different industry dynamics, skills, partners and distribution platforms", the report notes.
It recommends that a NZ Interactive Innovation Fund should support "creation of prototypes and minimum viable products" and suggests that the scope of newly created research and development tax credits be expanded to take in creative as well as scientific R&D.
"Design-led innovation is a key value creator in a digital economy," the report says. Yet R&D tax credits are generally only available for production processes rather than "the invention of new creative intellectual property, education or well-being solutions".
Included in the report are 30 examples of ways the industry is supported in other countries, with 'calls to action' to provide funding through a range of New Zealand agencies, including Creative NZ, NZ on Air, the Ministry for Culture and Heritage and Callaghan Innovation.