Game creator aiming high, as it defends wage subsidy
In the New Year, game studio RocketWerkz was riding high, with chief executive Dean Hall outlining plans for the company to take the top two floors of the new, $1 billion PwC Tower in Auckland’s Commercial Bay development.
Hall has been a hero of the local gaming scene. After returning from Europe, where he made a fortune creating a “mod” for zombie “shootem’up” game Day Z, he set up a game development company in Dunedin. Then, following a major investment by Chinese giant Tencent (which now owns 36 per cent of his company) he opened a new office in Auckland, dedicated to creating a new, highproduction-value, post-apocalyptic survival game.
But recently, Hall has taken stick on social media after a round of layoffs at his company’s Dunedin office, which coincided with Rocketwerkz taking $414,746 in Covid-19 government wage subsidies for 59 staff.
“We had a very tough time in Dunedin. We were actually going through a restructure there when the pandemic hit,” Hall said.
“Without the wage subsidy, it would be pretty certain that the Dunedin studio would have had to completely close. We managed to retain a fair few jobs there. I wish it was more, but we can’t pay people with hopes and dreams.”
Stephen Knightly, the wellconnected gaming industry veteran who recently joined RocketWerkz as chief operating officer, said the Dunedin office was reduced from 35 to 15 people in late March.
An Australian-based consultant questioned how RocketWerkz could qualify for the initial wage subsidy, which was for businesses facing at least a one-third reduction in revenue, when worldwide lockdown had seen a boom in gaming. United States giant Electronic Arts saw its net profit nearly double to US$418 million in the March quarter, for example. And while New Zealand’s largest gaming outfit, Path of Exile maker Grinding Gear Games, is privately held and does not release financial results, it did not seek the subsidy.
Knightly responded on that point: “It’s fair to say not all game projects have necessarily benefited from the lockdown. Those with games already in the market have seen audiences grow but not always revenue,” he said.
“International conferences and sales expos were cancelled, so the ability to pitch to publishers and other partners dried up for projects that were in development and many new game launches have been delayed.”
While the Auckland office is focused on the new survival game, the Dunedin studio works on separate projects.
“Overall, the company strategy is for the Dunedin team to focus on smaller, indie games and Auckland to focus on larger, blockbuster games,” Knightly said.
The Dunedin titles include Stationeers, a space station construction simulation, which Hall describes as in a “soft-launch, early access” phase, and an “indie” title that was going to be promoted at the GDC (Game Developers Conference) in the US in March. But this year’s GDC was axed amid coronavirus fears, though organisers are attempting a scaledback virtual version for August.
Hall said he anticipated a revenue spike after Stationeers and other new projects were promoted at the GDC. “But Covid stopped that cold,” he said.
Knightly stresses that with the Dunedin restructure behind it, Rocketwerkz is now hiring up north.
“We are now 48 in Auckland, with plans to hire another 10 to 15 in Auckland this year,” he said.
For the time being, Rocketwerkz will stay in its temporary digs on Albert St, amid the City Rail Link earthworks.
“We still plan to move into the PwC Tower eventually but that’s been delayed considerably. We don’t have an estimated time yet,” Knightly said. Pre-outbreak, developer Precinct Properties had planned to open Commercial Bay in March. It is now looking at retail tenants possibly moving in during June, with tower tenants later.
Knightly confirmed that Hall’s plan to spend $5m fitting out its two floors of Auckland’s most expensive commercial real estate was still a go — but added an “up to” caveat.
As for Hall, he doesn’t bear any grudge against those who gave him the biff on social media.
“I sympathise with those who are upset they got let go, and are venting on social media. But we had to lose some people to retain a studio at all in Dunedin,” he said.
And with the reorganisation behind it, his company’s South Island operation was seeing a rise in sales.