Published on the 02/06/2023 | Written by Heather Wright

New Zealand’s gaming sector is having its day in the sun, with a report this week suggesting gamers have the potential to aid an ailing freight and logistics sector coming hard on the heels of last month’s budget announcement of 20 percent rebates for games developers.

The report, commissioned by Hanga-Aro-Rau, the Manufacturing, Engineering and Logistics Workforce Development Council, found the highly fragmented logistics sector has lost thousands of employees to other industries and lucrative overseas roles in the past two years, and suggest, albeit in no great detail, that the gamers could be one answer.

“It’s just a result of so long without any action.”

Gamers, it says, have the requisite skills needed as the industry adopts technologies such as  automation, robotics and drones.

The report, drawn from interviews with employers of all sizes as well as industry associations, unions and employees, found employers accepting of the need to transition the current workforce to meet the changing skills need introduced by automation. One employer noted some of the newest cranes can be operated remotely, with the potential to have the current workforce operating multiple cranes from an on-site room with multiple screens.

“Others noted that they prefer gamers for roles for their business due to the similarity of skill required,” the report, from Deloitte says.

The critical shortage in the logistics sector is forecast to grow from 4,700 to 18,000 workers within six years if immediate action isn’t taken, the Manufacturing, Engineering and Logistics Workforce Development Council says.

“The industry is now looking to attract gamers who have the requisite skills needed to operate the new automation, robotic and drone technologies which are expected to be adopted in the future,” it says.

Chelsea Rapp, New Zealand Game Developers Association chairperson, isn’t completely convinced.

“I know almost nothing about the type of skills someone might need in logistics,” she told iStart. “But to be fair there are a lot of skills game players develop in the course of playing that I’m sure are applicable to lots of different fields.”

She believes there is plenty of potential for game developers to assist the logistics sector.

“The industrial applications of game technology have actually overtaken the game applications of game tech in the last couple of years,” she says.

“Game technology is being used across agritech and fintech and all kinds of industries – everything from training to simulations, so I would argue it would be very reasonable that game developers could assist in logistics, especially if it’s doing something like training.

“It’s entirely possible that game developers could help create apps or games for logistics companies.”

New Zealand’s gaming sector was worth $407 million in 2022, and Rapp says many sectors using  game technology to build their businesses and offerings.

“Game technology is  used across the entire tech sector and we are starting to see that in a much wider range of industries like geotech and aerospace.

“There are lots of examples of game developers going to work in the traditional tech sector, though I’d argue there is a greater influx from the tech sector into games just because there are a lot of people who want to work in this space.”

The sector got a ‘very welcome, pleasant surprise’ in last month’s Kiwi Budget, with the announcement of a 20 percent rebate for games developers’ expenditure. It’s something the industry has long lobbied for in order to compete with the even more lucrative rebates on offer in Australia, which can amount to up to 45 cents in the dollar, depending on the state.

A week on from the budget announcement, Rapp says there is a lot more hope in the sector than there was at the end of last year, or leading into the budget.

“It’s been such a hard year for studios not being able to retain talent and really struggling to get projects out the door because they kept losing people.”

She says the sector has lost 50-60 senior level people in the past year – a figure she says is ‘pretty sizeable’, for an industry that only has around 1,100 employees, especially when they’re all senior level.

“For the last two years the Australian incentive has had a really negative impact on the sector because so much of the value chain was moving over there.

“We had a lot of studios here saying they had investors willing to invest in their studio but only if they moved. If you’re a business that’s a really challenging proposition, especially if you’re a growing business with a lot of growth potential.”

But Rapp warns that while the rebate will provide a welcome relief for local game developers, she’s still expecting to see a decline in the industry size in the NZGDA’s upcoming survey, before numbers climb again in the longer term. It will be the first drop the sector has recorded in the survey’s history.

“The reality is the industry went so long without any indication from government that this was going to happen that, so many studios have already set up offices in Melbourne.

“It’s just a result of so long without any action,” she notes.

“We are incredibly grateful for what we have to this point, we had really hoped the government would have made announcements or commitments before Budget day.”

The 20 percent rebate will be available for game development studios who qualify and meet the minimum $250,000 expenditure threshold per year, with individual studios able to receive up to $3 million per year in rebate funding. It’s expected to cost about $40 million/year for the next four years.

Rapp says there’s still plenty of detail that needs to be worked out in terms of eligibility requirements and inclusions and exclusions.

A draft proposal, currently being worked on by MBIE, is expected to be available for public consultation later this year.