Special Report: Crossing borders, part two

The final part of a two-part in-depth report--how other countries are feeling the "games drain" from Canada's policies, and how they are fighting back.

Considering the significant benefits to companies making games in Canada, many have set up a studio or base there. EA, Ubisoft, Koei, Capcom, and most recently, Eidos, have all opened a Canadian studio.

Capcom International president Midori Yuasa admits that the R&D tax credits were one of the primary reasons for choosing the Greater Toronto Area for its new development studio outside of Japan. The company opened its Canadian arm in June 2006, and is currently working on mobile games, with plans to expand to other platforms. Yuasa said, "Toronto gives us access to a seemingly endless supply of young, talented, entertainment-savvy people, thanks to its colleges and universities. Ontario also offers relatively low business costs, exceptional R&D tax credits that you can't find anywhere else in the world, and helpful economic-development people to facilitate all aspects of a business startup."

Koei Canada set up shop in central Toronto in 2001, expanded in 2005, and plans to expand even further. Koei Canada's senior vice president, Hidenori Taniguichi, says the company chose the location because costs are reasonable, and because, "The fact that it's so multicultural is also an advantage, when, like us, you're developing games for the world market."

Even more companies are considering opening offices in Canada, or even moving lock, stock, and barrel over there. David Braben, chairman of UK-based Frontier Developments, admits that he is seriously considering a move, which is hardly surprising given his praise of the Canadian model. He told GameSpot, "We'd be foolish not to consider it."

David Braben, chairman of Frontier Developments.

Although Blitz Games is not considering a move to Canada, due to practical reasons--"many of our staff have put down roots here"--the company is outsourcing more and more. Philip Oliver, the company's CEO, told GameSpot, "It would be far too difficult and impractical to move abroad. However, we are already slowing UK recruitment and increasing outsourcing to other countries. Effectively, we are going to be creating jobs in other countries that could have been here."

Darius Basarab, senior business consultant for Ontario's Ministry of Economic Development and Trade, thinks this would be a shame. He said, "There's a lot of creativity in Britain. You see it in music. You see it in movies. You see it in the sheer volume of documentaries the BBC puts out--there's so much creative material there. And I think it would be a shame if that creativity was not applied to something like video games, and it sort of got lost in the shuffle." He added that he believed this was currently a "real danger" in Britain.

GIVING GAMES A POSITIVE SPIN

Basarab believes that in Canada, the games industry has achieved a level of recognition and respect that it is not currently afforded in other countries. He explained that having big multinational companies such as EA set up shop in the country has helped achieve recognition by providing jobs, boosting the industry's profile, and feeding into the economy. He said, "It's more acceptable here than it is anywhere else. But it took us 10 years to get this far."

Basarab believes that the games industry in countries like the UK needs to promote itself better. He said, "I don't see many self-promotion papers or anything that says it's the fastest-growing industry and it's a clean industry. I mean, video games are very, very clean, it's not like you're brewing chemicals or blowing things up." He continued, "There are games for the elderly. There are simulation games. There are children's games. There is all this good stuff, which is actually a larger percentage than the violent stuff, but all you hear about is the violent stuff." He concluded that in some ways, it was up to the games industry itself to put a different spin on the popular view of games, and applauded Nintendo for being one of the companies already taking a proactive stand in doing this.

Fred Hasson, CEO of Tiga, a UK trade association that represents the businesses and commercial interests of game developers, agrees. He said, "One problem, and this is not the government's fault, is that the games industry is still perceived as, for lack of a better word, 'dodgy,' so that the Daily Mail and all its propensity to paint games as all violent and depraved entertainment puts the government off from doing anything visible."

Fred Hasson, CEO of Tiga.

UNIVERSITY CHALLENGED

It's not all about the money. A big part of the Canadian success story is the way that the industry and universities maintain a continuous dialogue. Basarab believes this communication is essential, especially in such a fast-paced working environment as video games, where the technology and console formats are constantly changing. He said, "The feedback mechanism in Ontario is extremely strong. There is a dedicated group of people in the Ministry of Education that get up in the morning and all they do is collect feedback from the industry and try to make a connection with universities to make sure that whatever the universities are teaching is actually applicable."

Furthermore, private-sector companies can also get in touch with universities directly and meet to discuss particular needs, new courses that would be useful to them, and skills needed in their marketplace. He said, "That discussion is welcomed and it's encouraged. It's an open discussion and if there's enough people asking for the same skill, schools will change on a dime. They will actually implement those programs."

Braben believes that, unfortunately, the opposite is the case currently in the UK, where he thinks the majority of games courses are hideously out of date. "One of the things that is very worrying is there are over 80 games courses in Britain, and the sad thing is they aren't really teaching what we need for games at the moment. They are teaching where we were five or 10 years ago... The reality is that it is not a fast track to a career in games."

Hasson agrees. He said, "There is an acute problem in the supply of suitably skilled personnel, and a recent government-funded report showed that only 25-30 percent of 'games' graduates actually get jobs in the industry."

A job board in a Canadian university.

Basarab also believes that the Canadian university system helps get graduate students in the first place by providing a more realistic fee model than in other countries. He says, "It's very generous. The great majority of tuition is basically subsidised by the government. I think you're paying CA$3,000 to CA$4,000 ($3,000 to $4,000) a year in total. It's definitely not like in the US where you have to pay $40,000 to $50,000."

WHEN I HEAR THE WORD CULTURE, I REACH FOR MY GUN

Currently, France is awaiting a European Commission judgment to see if a gaming-industry tax-credits system--already approved by the French government--can be implemented in France, or whether it goes against the same EU rules that limit state aid. These tax credits would be based on a "cultural test," which will mean that tax credits can be given for any game deemed to have cultural significance to France, to be quintessentially French. In the UK, a similar system currently exists for the film industry.

However, the UK's ELSPA has rejected this approach. When contacted by GameSpot, ELSPA confirmed this, but declined to comment on the reasons behind the plan's rejection.

Andy Eades, development director of Relentless Software, is one person who is not impressed by the intended "cultural" restraints. He says, "What makes a game British? Lara Croft is British. The Getaway is set in London. Apple's product designer is British. It seems that the government can't figure out what being British is, so how are we supposed to get that one right? If it means 'niche,' and 'won't sell globally,' then it's an obvious nonstarter."

Andy Eades, development director at Relentless Software.

Instead, some developers think that the tax-credits system should be made EU-wide, and the cultural element removed. Philip Oliver from Blitz says, "Cultural grants would be a way of helping the UK compete in a fast-changing world, but not in isolation." Developers are also keen to point out that the industry is one that has huge investment potential, rather than one that needs help, and that tax credits are needed to grow the industry, not to help it survive.

WHERE DO WE GO FROM HERE?

It's obvious that Canada's cunning plan to entice the games industry onto its shores is working, and that other countries need to act if they want to keep up. Aside from the monetary perks given to game companies in Canada, there are a variety of other benefits that are offered to them. They are taken seriously as an industry, they are given help setting up shop and settling in, and dialogue is encouraged between them and universities, which ensures that students are learning things that are actually relevant to working in the industry.

Switzerland, which is not a full member of the EU, has been heralded by some as another country that might embrace tax breaks and a progressive view of the gaming industry. Electronic Arts has set up an office, its international publishing headquarters, in Geneva, and other companies are expected to follow suit.

Despite the good efforts of trade bodies such as Tiga and the Game Developer's Association of Australia, and the substantial contributions to the economies that the games industry makes, the governments in Australia and Britain seem to consider nurturing their games industries as a low priority. This shows that games obviously have a way to go to overcome the perception problem they have, even though the contribution the industry makes to the economy is at least now being acknowledged. The question is--by the time politicians in countries outside of Canada start looking to the future and taking new industries like gaming seriously, will it be too late for them to compete?

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Discussion

53 comments
Riprock
Riprock

Here's the thing. Business start-up support, tax credits for software (and hardware) development, and industry dialog with Educational institutions, etc., all existed in Canada prior to the boom in video games. They exist for ALL related industries. This was NOT build specifically for the gaming industry or to entice developers. Canada then added incentives to help the film industry. In other words, the infrastructure was already in place and used in other industries. It just so happened that it all came together as a real boon for game developers. Simply giving tax credits in other countries may not be enough, or maybe it could be. Who knows? In any case Canada was fortunate to build (perhaps as a fluke) a favorable infrastructure for all software developers that video game developers can capitalize on. The train was already built and moving at a pretty good clip before game developers got on board. The question is: Can other countries build a similar infrastructure (with all the pieces) or something better in a reasonable time? Probably, but for now Canada has a head start because they started over 30 years ago (when games were not even in their sights). It doesn't "seem" to happen often but it looks like Canada got something right here. They should be praised, not criticized. The True North strong and free!

alan31362
alan31362

Great article-- most countries are shortsighted when considering the support they SHOULD be giving the gaming industry. However, its final point is dead wrong. The minute another country wants to start to get into gaming, they will have the tools to do so, and in a big way; these are the fruits born of interconnectedness and globalization. Tax cuts, university collab. in the computer sciences... just two of the many tools for all creative and IT development in a nation. It only helps that so many of the younger generations are so willing to chase their dreams and make the games they love to play, which is far from the same as under-class service industries. ... all of that, and the fact that canada's economic power could be blown by the wayside (in connected, relative terms: see bear stearns) if another cnation wishes to use some of the same tools to play the game and attract talent. watch list: china, vietnam, estonia, ukraine, russia, qatar, dubai, india, and brazil.

kalossimitar
kalossimitar

Who else thinks speedjunkie4 is illiterate because he cant even spell "separatist" right, even if he's English??

The_Dude1212
The_Dude1212

Hmm...so my career in Video Games hasn't come to a dead stop just yet!

Cablestein
Cablestein

EA's largest studio is in Vancouver, and I think it's the world's biggest game studio as well? Isn't it EA's HQ too? Out of Vancouver comes a lot of EA's key franchises (one has gotta be NHL of course =). They have a studio in Montreal too, and own a top mobile games company there too (Jamdat), maybe it's the same Montreal studio? EA also owns the DICE studio in London (Ontario), which basically creates the Unreal games. The other big player is Ubisoft in Montreal. They have a huge studio there, at some point I read 1,000 people. They have been pumping out all the Splinter Cell stuff, Prince of Persia, Assassin's Creed, etc. BioWare is in Edmonton, or something. They created Mass Effect, Star Wars KOTOR, Jade Empire, Neverwinter Nights, Baldur's Gate, etc. Lots of other unexpected studios all across, but mainly it's Vancouver-Toronto-Montreal, and by Toronto that also includes Southern Ontario. Did you know there's a Rockstar studio in Toronto? Too bad they aren't producing GTA =(. Montreal is probably top of the 3 cities up till now, but that is changing, Toronto is surpassing everyone. I think Ontario came late with multimedia tax credits compared to Montreal and Vancouver (which have been more arts centered in the past). But in terms of general economy and power, Toronto trumps Montreal and Vancouver no question, so in no time we'll be ahead. Another factor: Aside from our relatively good film industry (film tax credits =), a lot of 3d software and hardware for games and movies is created in Canada as well. Alias/Wavefront (Maya) and Side Effects (Houdini) are headquartered in TO, which has helped grow a lot of smaller 3d companies too. ATI (makers of 3d graphics cards) has their world headquarters in Toronto. Corel is headquartered in Ottawa. IMAX film technology is Canadian, and headquartered in Toronto. SoftImage (3d software), headquartered in Montreal. Matrox (remember them, made graphics cards), headquartered in Montreal. ToonBoom (most modern day cartoons are created with this software), headquartered in Montreal. So basically everything is setup for a win-situation. It's no question why now in 07 and looking at 08 and beyond, a lot of top titles are coming out of Canadian game dev studios.

Lorick_vs_Vash
Lorick_vs_Vash

This article is very Canadian... It just focuses on Ontario and forgets all the other provinces. But its still get the point across that Canada is playing a really good part in video game development. Go figure EA makes the best NHL games... and so happens to have a office in Canada. I don't think I have to collaborate any more on that statement..

gnutux
gnutux

Power to all the federal and provincial government across the country to get better games out there. Now if we could pivot to 2nd place, that would be awesome!

speedjunkie4
speedjunkie4

Me! Me Me Me! I think kalossimitar is a sepretist!!

MassacreMonk
MassacreMonk

[This message was deleted at the request of the original poster]

foxracing1313
foxracing1313

Who else thinks kalossimitar is a hardcore seperatist?

speedjunkie4
speedjunkie4

kalossimitar : Just shut up about all this. It is getting old.

powerframe8
powerframe8

Now wouldnt it suck if Quebec actually gets away with making its own country and leaving Canada...

mopeyking
mopeyking

People there are plenty of great games made in Canada not from quebec, relic entertainment, bioware a whole bunch in Vancouver, which in fact has a slightly bigger gaming industry then Quebec. However Ubisoft Montreal is really good at making games :) . yes ontario is rather small compared and i have know idea why they were focused on Ontario- Though i am sure the video game industry in Ontario is increasing no doubt about it

tclvis
tclvis

One more thing Canada is doing right. The American government lately seems just as hell-bent as our British cousins to portray gaming as dodgy and undermine it as much as possible, unlike its usual stance on every other big business. As usual, they learn nothing from their calmer, more progressive northern neighbor. As an American, I am thrilled that Canadian, British, Australian, French, and Indian (Sony's MMO division, at least) developers are emerging at the forefront, because more countries, cultures, and perspectives in game development will, as in any other arena, create a broader pool of ideas to draw from and thus strengthen and drive innovation in the industry as a whole. The EU would do well to learn from the ying-yang examples of the North American neighbors, overturn their current 'restrictions,' and create incentives for game developers in all its member nations. O Canada-- all of it. (And at least three provinces were either mentioned or referenced through their games in the two-part article, for those of you with ADD after that page click; see paragraph three of page one.) Nice work, Emma, as always.

Merl57
Merl57

Canada? I guess I got out of the loop this article is too long to read so I'm gonna play Mass Effect.

devtek
devtek

"It's obvious that Canada's cunning plan to entice the games industry onto its shores is working" Why does almost all articles in the states about Canada make it out like we have a grand plan to take over the world with subversion? It's true, but come on people stop being paranoid :P

SorrowsFlame
SorrowsFlame

Is it me, or do people from Quebec complain way too much?

kalossimitar
kalossimitar

@i_nick Did you see that half the article was about Ontario? I did. Ontario is in the special effects and movie industries, mostly. That article is biased, theres no mention of Quebec, nor of Alberta, even if Kotor was made there.

slightlyNick
slightlyNick

KOTOR came from Alberta based Bioware, one of my favourite games.

kalossimitar
kalossimitar

WOW just love it....Am I wrong or did not Prince of persia, assassin's creed, splinter cell, soon to come Deus ex 3, etc., etc. all come from QUEBEC??? Like someone said before, we really see in this article UK's propaganda for federalism in Canada: "Canada bla bla bla, Ontario bla bla bla" Heres a simple question: does any of you remember a canadian game, a GOOD one, that came from somewhere else than Quebec??? dont use google, be honest, please.

enoslives7
enoslives7

[This message was deleted at the request of a moderator or administrator]

Deathscyth-Hell
Deathscyth-Hell

"I think you're paying CA$3,000 to CA$4,000 ($3,000 to $4,000) a year in total" My tuition is 7k... and thats not counting residence, textbooks and stuff

Phazevariance
Phazevariance

Nothings leaving the US, those are still there, but they are expanding to Canada... see the difference? Plus, think about it, we get snow 50% of the year, we spend a lot of tiem indoors playing games, an dprogramming them. Good combination, for this location.

nobeaner
nobeaner

Whats that? More jobs leaving America? What a surprise... And I don't actually blame the companies that are doing this. I mean its business to try and save money.

chechin
chechin

Griffonmti, Quebec is part of Canada... whether the Quebecois like it or not. If you are talking about how the provincial government of Quebec has specific laws that help the industry even more than what the federal government has, then I must agree with you, however this was briefly mentioned in the previous article ;)

griffonmtl
griffonmtl

It's very bad them don't mention anything about the place of Quebec in the industry..

yboucher
yboucher

Erm, not to diss, but actually this report was fairly lazy. Not that many sources, and absolutely NO mention of the outsourcing to India and China. And I still don't get that focus on Ontario !! There wasn't ONE mention of Montreal in the WHOLE report, and considering that's where it all started way back with Ubisoft in the early '90s... i don't know, this report feels lazy and rather incomplete. Sure, i'm not on Gamasutra or Gamesindustry.biz, but still....

SlikNik27
SlikNik27

Great reporting. Nice work, Emma.

X-RS
X-RS

well hope i can get through high school. high school sucks obviously. but when in a small town it sucks galore. teachers suck, rumours that seem almost impossible spread in 10 seconds. and if you live outside of town you need transportation to get a job. if your in canada in winter, you need a car. i the summer if you bike you sweat. worst of all your parents work 24/7. and after hearing university i can only shudder. plus only 30% get work in games. my chances are looking slim. i cant wait to get outta here :(

Mercanis
Mercanis

Hmm... deep. I always hear that game development courses aren't preparing students for their hopeful careers here in the US. Hopefully, these courses will adapt quickly and provide the industry with some great talent!

punisher2k8
punisher2k8

AuthenticM quebec is in canada fool ;)

Naganox777
Naganox777

Let's see if Canada can take the top 2 now.

AuthenticM
AuthenticM

Yeah, long live Ca... ahum, I mean Quebec!!!

ken-e
ken-e

[This message was deleted at the request of the original poster]

ken-e
ken-e

I agree with GAMERGAMERGAMER. Why focus on a small market like Ontario (Toronto) when Vancouver and Montreal are 100 times bigger. Vancouver has Relic (Company of Heroes), Radical, Rockstar Vancouver (Bully), Propaganda Games (Turok) and the largest video game studio in the world with EA Canada...just to name a few. Montreal has Ubisoft, EA Montreal, and Eidos

Yuck_Too
Yuck_Too

Canadians are nothing more then unarmed Americans with healthcare and game addictions. Oh...and you gotta like the Canadian Beaver.

matt_dangelo
matt_dangelo

i think that alot of coding collages and stuff are found in canada..even microsft and ubisoft have coders up there in ol' canada.

hatieshorrer
hatieshorrer

Sounds like Canada will have a growing software market.

bcolter
bcolter

/Looks into crystal ball I see a career change in my future.

metroid_dragon
metroid_dragon

Ya, many game companies, including EA, hired tons of students right out of UBC, they hold info sessions there regularily.

Stevokenevo
Stevokenevo

He says (andy eades), "What makes a game British? Lara Croft is British. The Getaway is set in London. Apple's product designer is British. That reminds me of an article i read in the newspaper recently where Morrisey was quoted saying that Britain has lost its cultural identity. Why does it always seem that we (britain) are always out of touch with the 'now'? Frustrating.

jimjons1981
jimjons1981

I personally think Canada next to Japan will be the tech haven for the world. We have a booming video game industry as well as other general tech companies such as RIM(Blackberry makers for all you un-educated Americans) and many other located in the heart of Ontario (Waterloo), I work at a high tech firm in which we are the industry leader. We Candians are true techies and we ROCCCCCCCCCCCK!

Nyx220
Nyx220

Well i'm 2 years into a Games design course and to be told that my course skills arnt relevant to the industry and only 30% get a job is very worrying. Furthermore the government arent helping things as usual. All this just means that i'll have to leave the country whoopee! Canada i'll see ya in 2 years time

MasterChief725
MasterChief725

well, since they are the 3rd biggest gaming country...studios r gonna open up...go canada!

GAMERGAMERGAMER
GAMERGAMERGAMER

I really love it how they didn't bother mentionning Montreal in that article at all since the Quebec province was the first to introduce video game programs in the mid-90 for ubisoft and that's where most of the studios mentionned in the article comes from. Vancouver could also have been an honorable mention as they make pretty much all EA Sports games down there. This shows this report comes from the UK. Loyalist much ?