Bid to 'claw back' Gameloft grant

5:00 pm on 29 January 2016

The multinational video gaming company that has closed down its Auckland branch, putting 150 people out of work, was receiving $3.5 million in government grants.

Gameloft, Parnell, Auckland

Gameloft's studio Photo: GOOGLE MAPS

Paris company Gameloft grew quickly in New Zealand after setting up in Auckland 10 years ago, to three times the size the industry expected, but has decided to pull out.

The maker of My Little Pony and a Despicable Me video game was capitalised at $700 million dollars and is the biggest single gaming employer in the country.

Crown agency Callaghan Innovation this afternoon suspended its grants.

It had given Gameloft a total of a little more than $3.5 million in grants, and said it would now work to claw all of that back, save $5000 of student grants.

The company's Asia-Pacific region chief Maxime Delobel, who is in Auckland today, did not respond to RNZ's requests for comment.

Gameloft employed a quarter of the game-maker industry's workers.

In October 2015 the company's local manager Daniel Stephens was quoted in an official case study lauding Gameloft's success, saying, "We can only see it grow from here."

Science and Innovation Minister Steven Joyce said it was not possible to have 100 percent success when encouraging such industries.

He now expected Callaghan Innovation to make sure it got taxpayers' money back.

"There's several hundred companies across game developing, ICT, high-tech manufacturing that get these growth grants of around 20 percent of their R&D (research and development).

"It's the same deal for everybody and there's also a claw-back provision so, let's say they didn't continue their R&D in New Zealand, Callaghan Innovation has the right to claw back that money."

Gameloft, which made games such as My Little Pony, Despicable Me: Minion Rush and Country Friends, gets to take away any intellectual property developed here.

There was no way to stop that, and the grants scheme did not need to be tightened up, Mr Joyce said.

Callaghan Innovation spokesperson Iain Butler said it appeared all research and development had now ceased entirely, but it was not clear why Gameloft was pulling out.

There was industry speculation it could be linked to media rival Vivendi buying into Gameloft, which had recently shut studios in other countries and opened studios in others, such as Nigeria.

'Everyone started panicking'

A staff member who worked at Gameloft for five years said there was panic in the lead-up to the company's closure announcement.

Staff were told two weeks ago they had to figure out a way to stop revenue loss and over-expenditure, and yesterday they were told it would be their last day at work, said the animator who asked not to be named.

A lot of bad decisions were being made by the head office, he said.

"We saw the signs after the recent release of this farm game called Country Buddies. We were expecting that this game will not actually be making us money and profit.

"Then we hear the news two weeks ago that there is an urgent staff meeting. Everyone started panicking, basically. They said, 'OK, that's it, we can see the downfall of this studio'."

Some employees had started applying for work elsewhere and he and others were thinking about moving overseas, he said.

New Zealand Game Developers Association chair Stephen Knightly said the grants to Gameloft had been good, with it working as an incubator to game-makers who had gone on to set up their own studios.

Mr Knightly expected many of those laid off to quickly find other video-game jobs. Already, Grinding Gear Games said it had offered six people work.

Gameloft is worth $700m on the Paris stock exchange.

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