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Housing a losing game for many

Wellington’s brutal housing crisis could be about to claim its next scalp: the game development industry.

Workers and studio heads within the industry – projected to become a billion-dollar sector by 2025 – say lethal house prices and rental costs are driving talent offshore. A new tax incentive scheme offered by the Australian Government compounds those problems, with studios across the ditch potentially able to offer salaries that are 30 per cent higher.

Game developer Brandon Grimshaw moved to Wellington from Australia at the beginning of last year, accepting a ‘‘dream job’’ at a small indie studio. But extortionate costs for even mouldinfested houses meant he was moving back to Australia as soon as he could.

‘‘Wellington’s a great city, but I can’t see a future here. Even if I did get a higher paying job, the amount I would need to save to buy even a modest house is outrageous,’’ the 28-year-old game developer said.

There was also a ‘‘health drain due to unhealthy homes’’, Grimshaw said.

He already had one foot out the door, currently working remotely for a Melbourne-based games studio until borders reopened. ‘‘Why would I stay here when I can go to Australia, make more money, and pay less for a house?’’

Wellington has the third-priciest property market in the world, as well as the highest rental costs in the country, and the fewest houses for sale. Those combined evils were the bane of numerous industries, contributing to a recent exodus of emergency department nurses.

The game development industry grew by 42 per cent, in 2019, to $203.4 million, according to a survey by the New Zealand Game Developers Association (NZGDA), which also projected video gaming would grow into a billion-dollar sector by 2025.

And, in spite of the pandemic, the industry had continued to grow its workforce by almost 30 per cent over the last year, from 748 workers to 969 workers. Wellington was a main nexus for that work base: more than 300 workers, with 14 out of 63 studios found in the region.

Mario Wynands is the founder and chief executive of Pikpok, one of

the country’s largest games studios. He said half a dozen workers had left the company in recent years with ‘‘housing as a major factor’’.

‘‘For some people, that [housing costs] was the only reason they left. We run a good company here . . . but that was outweighed by the weight of needing to get on the property ladder.’’

Wynands, however, worried that closed borders were a handbrake on that exodus, and a greater outflux of staff was possible once they reopened.

At the same time, border closures stymied growth in the industry, as it relied on hiring staff from overseas

in order to ‘‘train up local staff, and help ratchet the industry up’’.

Studio Mayday director Joshua Boggs said his studio paid staff well, but was ‘‘constantly up against’’ exorbitant housing costs in Wellington. ‘‘They can . . . go somewhere else and have a massive amount more discretionary income – which they can choose to save for a house.’’

Three games developers – who didn’t wish to be named while still employed in New Zealand – said they would strongly consider moving overseas once borders reopened, with Australia as the most likely destination.

‘‘I can’t even do basic things like own a pet at my rental – let alone afford a deposit on a house,’’ one of them said. ‘‘I’m not even on a low salary, but I can’t afford a house here,’’ another worker said.

New Zealand Game Developers Association chairperson Chelsea Rapp said the industry paid ‘‘above the average median salary’’, though exact figures weren’t available. Housing was one piece of the puzzle, she said – the Government needed to introduce tax incentives similar to those in Australia. ‘‘It’s ultimately just a symptom of a larger issue. It’s very challenging for studios to be able to offer salaries that enable people to buy houses in this market.’’

Rapp said workers in Australia could hope to earn 30 per cent more for doing the same thing. The NZGDA had urged the Government to adopt a similar tax incentive scheme in order to compete with Australia.

Minister for Economic and Regional Development Stuart Nash and Minister for the Digital Economy David Clark had met representatives from the NZGDA just before lockdown. Nash said the Government was ‘‘committed to looking at ways to further develop’’ the game development industry.

It could be a billiondollar industry by 2025 – unless a brutal housing crisis intervenes, writes Ethan Te Ora.

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2021-09-25T07:00:00.0000000Z

2021-09-25T07:00:00.0000000Z

https://fairfaxmedia.pressreader.com/article/281676848057943

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