Canada takes its $3 billion video game industry seriously as it pushes sector to new levels

Canada takes its $3 billion video game industry seriously as it pushes sector to new levels

 

SAN FRANCISCO — In the hustle and bustle of downtown San Francisco, the Game Developers Conference (GDC) takes place each March at the Moscone Center and surrounding city blocks. Sessions by industry members teach new tricks to those who make video games, business meetings take place behind closed doors and two large expo floors are filled with booths from companies small and large.

In one corner, for the second year in a row, a Canadian takeover took place with rows of independent game studios all showing off their new titles — and taking a shot at stardom. Being there is only half the battle, however. A key element of their success is a makeshift Canadian pavilion, staffed by members of the Trade Commissioner Service (TCS) who work with the studios to identify their objectives and arrange meetings with publishers from other countries through its large trade network in hopes of generating exports. For many studios, these connections, together with financing through the Canada Media Fund, can help their games go international.

“The world owes a little bit of a debt to the Canadian government for what the Canada Media Fund has done in helping jump-start a lot of really amazing games,” said Seattle-based Chris Charla, director of Microsoft Corp.’s independent developer program for Xbox. “The government support for video games in Canada has been tremendous and the net result is that Canadian games are by far some of the best in the world.”

The TCS, which works with other sectors, has been involved with GDC but in a smaller capacity, since 2008. At the GDC, decision-makers from around the world gather in one place. In the past two years, a Canadian booth and separate rooms have been set aside for meetings that the TCS helps set up in advance or right on the show floor.

Canada ranks third in the world for developing video games, behind the U.S. and Japan, according to the Entertainment Software Association of Canada. Last year, the industry employed 20,400 people in more than 470 studios and contributed $3 billion to the country’s GDP. Canada — a country known for its tech savviness and high mobile adoption rates — now has the leading countries in its sights in terms of becoming a gaming powerhouse.

On a federal level, the Canada Media Fund acts like a loan and helps develop, promote and finance projects. Tax credits can also help cut labour costs by 17.5 to 50 per cent. All told, there is a 30.6-per-cent cost advantage when compared to the U.S., according to a recent KPMG study.

There are additional provincial tax incentives in places such as Quebec, B.C. and Atlantic Canada — all of which were present at GDC — and funding to help give recent graduates work out of school.

Chad Hipolito/National Post

Chad Hipolito/National PostCodename Entertainment CEO Eric Jordan at his office in Victoria. Canada is becoming a video game powerhouse and the government is giving tools and resources to help independent developers like Jordan get off the ground to make games.

Victoria, B.C.-based Codename Entertainment creates computer and mobile titles in the strategy and role-playing genres, with titles such as Crusaders of the Lost Idols and Bush Whacker 2 receiving tens of millions of plays. The company uses funding programs and tax incentives from different levels of government to help make its games, but CEO Eric Jordan said the Trade Commissioner Service’s matchmaking program on the business-to-business side is a major help.

“In the national economic strategy for Canada, video games are one of the focus industries so the Trade Commissioner provides a lot of support,” Jordan said in an interview during the show that ran Feb. 27 to March 3.

“My day today and part of tomorrow is mostly back-to-back meetings (set up by TCS) with various people. I really don’t know much about Asian publishers, for example … so I was meeting with folks from Japan, China and others.”

The TCS put together a whopping 117-page book for this year’s GDC to give international businesses an overview of the industry and a database of the dozens of Canadian developers that were at the weeklong event. Information includes company objectives, size, types of services offered and genres.

“Usually what they do is they ask for your objectives … and then go from there and cross-reference with their contacts based on being a great fit,” said Jean Simon Otis, co-founder of the six-employee Chainawesome Games based in Quebec City. “Then they’ll send an e-mail to both of us and see if we can meet at GDC.”

Not all Canadian developers use government funding such as the Canada Media Fund, since they may have other ways of financing their titles. But most studios opt for the matchmaking service once they find out about it. Other companies around the world may not answer the phone for a small independent developer, but they will for the Canadian government.

For some companies, however, the Canada Media Fund and other financial resources are crucial to getting off the ground.

“It completely lit the fuse,” said Ryan FitzGerald, creative director of Winnipeg-based Evodant Interactive Inc., which has an AI-driven role-playing game for PC and consoles called Gyre. “By getting the production funding from the CMF, we can finally staff up. Winnipeg in particular has some extraordinary talent, both on the engineering and arts side, and it’s been a pleasure to hire and work with the people we have now.”

The amount of funding a studio receives from the fund depends on the scope of its approved project, and it’s up to the company to decide exactly how to use it. For example, if overhead costs are kept lower than expected, more features could be added to the game before it is completed.

“We knew that with the money we got, eventually the cupboard would be dry, especially if we were irresponsible with it,” FitzGerald said. “We work with the stakeholders and the CMF to make sure that the budget was responsible and appropriate.”

With a significant provincial and federal push across all regions of Canada to support both independent and major studios alike, the video-game industry in Canada shows no signs of slowing down. The boom is also helping generate interest and create jobs for future generations that some sectors struggle to match.

“Video games have this really important role to play in (Canada) for helping to go to high school and middle school students and say, ‘You know those things that you really enjoy as hobbies? Those are very viable careers,’” said Codename’s Jordan, who is also on the board of directors of DigiBC, a digital media industry association.

“Video games are a subsector of this exploding, broader tech sector that’s just really understandable and identifiable.”

Financial Post

jomcconnell@postmedia.com
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