Case Study - Zero Latency

Zero Latency provides truly immersive free roam virtual reality (VR) experiences to millions of customers at over 100 locations in more than 26 countries across the globe.

Founded in 2015 in Melbourne, there are Zero Latency locations all across the country with new ones opening all the time. The company operates using a licensee model, where new VR games are developed in Australia and often leverage globally-recognised intellectual properties.

Having invested substantially in the development and production of their games using local talent and resources, Zero Latency’s leadership team was understandably excited when the Federal Government announced the new Digital Games Tax Offset (DGTO) incentive.

Preparing a submission for the DGTO

Announced in 2021, the DGTO officially passed into legislation in July 2023. Promoted for its ability to level up the Australian digital games sector, the incentive ultimately allows eligible game developers to claim a 30% refundable tax offset on development expenditure. The program is overseen by The Department of Infrastructure, Transport, Regional Development, Communications and the Arts (Office for the Arts). 

Glenn Johnson, Chief Financial Officer at Zero Latency, says the introduction of the DGTO was a big draw card to continue developing their games locally in Australia. 

“We were founded in Australia and are proud to be growing so fast nationally and internationally with our original digital VR games and licensee model. Many Australian companies may be tempted to shift game production overseas where labour costs may be cheaper, however we are proud to export Australian IP globally. 

“When the Federal Government started talking about a tax rebate for organisations that could demonstrate eligible digital game development in Australia, we were definitely interested. As that is a core element of our business model, we kept abreast of it and were very happy when the legislation passed.”

Engaging with the Office for the Arts, Glenn began the process of preparing a submission for one of their most recently developed games: Outbreak. 

“Outbreak is also now our most popular game to date and has been played by thousands of players across the country and around the globe with exceptional reviews. A very considerable amount of effort and expenditure went into developing it and making it available to the public, and we wanted to express this effectively through our submission to the Office of the Arts."

“I had a contact at RSM (Damian Selitti, RSM Partner) and spoke with him about the DGTO. He connected me with their internal DGTO experts, Peter Xi and Liam Telford. Peter and Liam had an impressive amount of knowledge in terms of the DGTO and its application in our industry, so we were keen to engage them to help with the process.”

A bright future for digital games development in Australia

Peter and Liam assisted Zero Latency to prepare a DGTO submission to the Office of the Arts for Outbreak, drawing on their extensive understanding of the DGTO legislation, digital games industry, and tax claims. Liam is also an industry-wide expert on all tax technical matters, so his ability to deep-dive into legislation from first principles assisted with presenting a well-reasoned view to provide Zero Latency with the best possible outcome.

“Zero Latency is one of Australia’s greatest success stories in the gaming world and it was a pleasure to work with the team,” says Peter. “RSM Australia has invested significant time into our Digital Gaming Sector Group and is excited to continue to advocate for Australian gaming businesses on the national and global stage.

“The DGTO is a fantastic step in the right direction, though as our work with Zero Latency showed, there are a number of avenues to potentially maximise the available funding which may not be immediately apparent. The infancy of the program in Australia means there are a number of technical and legal issues which may need to be navigated given many of the definitions for eligibility are untested. 

“To achieve the outcome, we were required to perform a deep dive into the legislation and supporting materials, and work collaboratively with the Minister of Arts team and Zero Latency. We were also able to draw on our international Gaming Group experience, where RSM supports many of the biggest players in the world in the Asia Pacific, Europe, and Americas.”

Of working with RSM, Glenn says “We were very pleased that the submission was successful and we received a substantial tax refund. It was a great outcome – not only for that particular game, but as an incentive to continue developing our digital games in Australia knowing that this program is available to us.

“We are grateful to RSM for their insight and efforts, and to the Federal Government for putting our industry in the spotlight which does help us represent Australia on the global stage.”

“My experience with RSM was terrific. Everything was very prompt and it didn’t take them long to produce exactly what we needed for the DGTO submission. I found it very easy to work with the team, and the result means that we can confidently continue developing digital games in Australia with the support of the DGTO.”
 

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