Proposed design of eligibility criteria

Eligibility criteria are a key tool for targeting the delivery of the GDSR to the right firms for the right activities. This will help the GDSR reach its goals and the game development sector to reach its potential. We want to hear your views on the following proposals and any other factors you feel are important to include in eligibility criteria.

Eligible businesses

A business may be eligible to apply for the GDSR if:

  • the business is a New Zealand resident that has a New Zealand Company Number; or
  • the business is a foreign resident that has a permanent establishment in New Zealand and a NZ Company Number

when the business makes its application and when the rebate is due to be credited to the business;


  • the business is primarily involved in developing digital games. For clarity, a business would not be primarily involved in developing digital games if it derived less than 75% of its average annual gross income from such activity in the previous 3 financial years.

Businesses that are unsure of their eligibility may submit a registration for the rebate (see next section on application process). The delivery agent (NZ On Air) would assess whether the business’ activities are in the spirit of the rebate and support the ongoing development and growth of the sector.

Eligible games

For the purposes of the GDSR, a digital game comprises content, game mechanics (rules) and code, and player participation that changes the outcome. It is in an electronic form that is capable of generating a display on a portable electronic device or a computer monitor, TV screen, liquid crystal display or similar medium. Eligible formats include virtual reality (VR), augmented reality (AR), mobile, tablet, console, hybrid, installation, PC and multiplatform games.

The GDSR will apply to eligible expenditure on digital games that are intended for general public release for entertainment or educational purposes (including serious games), and which are made available for download or use over the internet.

The GDSR will not apply to expenditure on digital games that are:

  • a gambling service or substantially comprised of gambling or gambling-like practices[1];
  • containing material that would be refused classification by Te Mana Whakaatu Classification Office;
  • pornography;
  • gamified software primarily designed for another purpose (e.g. gamified accounting software);
  • linear content with no or limited interactivity (e.g. a 360 degree movie played on a VR headset);
  • developed for industrial, corporate training or institutional purposes; or
  • intended for commercial advertising purposes or to promote a product, entity or service.

Eligible expenditure

For the purposes of the GDSR, eligible expenditure is expenditure incurred by a business in, or in relation to, developing and commercialising digital games. Such development may include post-launch content creation (i.e. game updates and downloadable content) and adaptation or porting of a game for use on particular platforms.

For clarity, specific inclusions are:

Market-level remuneration paid through the PAYE system and provided to employees and independent contractors who are domiciled in New Zealand who perform work or services directly for the business that are attributable to the development of digital games and which include the following types of functions and tasks:

  • Project management
  • Development – including, for example, game design, software development and programming, engineering (including for audio, graphics, physics, software and backend and servers), prototyping, and product management.
  • Writing and story designing – including, for example, narrative design, world building, character design, and cultural consulting (including on te ao Māori).
  • Production – including, for example, artistic, creative and design direction, and production.
  • Art and design – including, for example, drawing, painting, animation, performance (for music, voice and motion capture), song writing, composing, music and sound design.
  • Marketing and community development – including, for example, go-to-market strategy, community management, influencer engagement, social media management and content creation, user acquisition management, and localising games for specific markets / languages.
  • Live operations of an online game – including, for example, data science, business intelligence, metrics and analytics management, playtesting and build management / deployment.
  • Player research and game quality improvements – including, for example, user experience design and testing, behaviour analysis, and quality assurance testing.

It will also include other people performing similar tasks or functions to those listed above.

Other specific inclusions are:

  • Expenditure on research[2] for development of digital games.
  • Expenditure on prototyping.
  • Expenditure on underlying game infrastructure such as game engines.
  • Expenditure on user testing, debugging and collecting user data for digital games.
  • Expenditure on game production software as a service, and game production hardware and software depreciation costs.
  • Expenditure on online hosting and distribution of the game.
  • Expenditure on obtaining or maintaining a classification from Te Mana Whakaatu Classification Office.
  • Expenditure on licensing of NZ material (e.g. music) when material is NZ held copyright or created by a NZ supplier.

Expenditure exclusions

  • Expenditure on general business overheads such as:
    insurance, human resources, legal services and auditing;
    travel, accommodation, catering and hospitality;
    visas or work permits.
  • Expenses incurred in relation to the financing of the business.
  • Expenditure on bonuses to employees.
  • Expenditure on or in connection with employees and independent contractors whose roles are not directly related to game development, such as administrative employees, and sales professionals.
  • Expenditure on employees or independent contractors who are not domiciled in New Zealand at the time of the expenditure.
  • Expenditure on the use of land or premises.
  • Expenditure on servers, or the rights to access servers.
  • Other depreciation expenses.

Businesses may not claim expenditures for which another business has already claimed. For clarity, when contractors are engaged, any rebate claim should only be made at the top-most level, i.e. the owner of the project, not at the contractor level. Business may only claim expenditures incurred in the year for which an application is submitted.

At times businesses may receive Government funding from other sources. The GDSR does not apply to expenditures that were already funded directly or indirectly by other Government grants or subsidies (such as R&D grants, grants from CODE, etc).

In determining eligible expenditure, the expenditure is taken to exclude GST. For clarity, the initial $250,000 expenditure (the minimum threshold) is considered to be claimable under the GDSR.

Questions on eligibility criteria

  • Do you agree with the criteria we have identified? Why, or why not? What would be better?
  • Do you think any of the criteria unduly narrow or widen eligibility compared to the scheme’s goals? Why, and how could it be improved?
  • What are your views regarding potential eligibility of expenditure on externally provided training that is relevant to developing digital games?
  • What are your views regarding potential eligibility of expenditure on royalties?
  • What are your views regarding eligibility of onshore hosting and servers vs offshore hosting and servers?
  • Do any of the criteria pose undue difficulties from an accounting or administrative point of view? Please elaborate, including any views on what might work better.
  • Are there any additional criteria you think should be considered?


[1] This includes lootboxes or similar game mechanics.

[2] As an indicative guide for the purposes of the GDSR, research comprises creative and systematic work undertaken to increase the stock of knowledge and to devise new applications of available knowledge. It should be novel, creative, uncertain, systematic, and reproducible.

Frascati Manual, "Concepts and definitions for identifying R&D"(external link) — OECD (2015)