Ontario considers tweaking game incentives

The province of Ontario is home to one-third of Canada's population, but only a fraction of its gaming industry. Whereas British Columbia and Quebec play host to some of the largest third-party publishers and highest-profile studios in the world, Ontario's gaming companies were responsible for just $70 million in revenue in 2006, according to a new article on IT Business.

However, Ontario is hoping to grow that sector considerably, and the article runs down a list of recommended changes to provincial tax incentives made in a recently released government report. Titled Ontario 2012: Stimulating Growth in Ontario's Digital Game Industry, the report advocates hiking the potential tax credits that developers can receive for making games in the province. Currently, Ontario studios that own the intellectual property of the game that they're working on can earn as much as a 30 percent tax credit, whereas their counterparts in Nova Scotia and Manitoba can qualify for 35 percent and 45 percent, respectively.

Nevertheless, not all developers are in favor of that move. The article cites Digital Extremes president Mike Schmalz as saying that he would rather see an easier-to-use tax-credit system, or perhaps one that didn't have the intellectual-property requirement. Schmalz noted that gaming startups frequently seek to sell their IP to publishing partners.

The report also recommends that Ontario set aside $1 million every year to help developers prototype new next-generation console games for publisher pitches. As Secret of Monkey Island creator Ron Gilbert has attested to, funding prototypes can be a major hurdle when pitching a game to publishers.

Other suggestions made in the report include extending the length of time for which developers can claim credits (currently it's limited to three years per project). The report also suggests letting developers claim the credits annually instead of only at the project's end, creating a public-private fund to attract venture-capitalist investment, and using an existing job-creation fund to entice international companies into the province.

In addition to Dark Sector developer Digital Extremes, Ontario also plays host to such notable companies as Silicon Knights (Too Human), Rockstar Toronto (The Warriors), and Digital Leisure (Dragon's Lair).