Article from: http://www.canadianbusiness.com/article/98285--vancouver-s-video-game-industry-is-slowly-disappearing: Sept 21, 2012
On a recent trip to Europe, Brad Duguid, Ontario’s minister of economic development and innovation, made a point of stopping in at the headquarters of Ubisoft. The French video-gaming giant, responsible for such titles as Assassin’s Creed and Prince of Persia, opened a Toronto studio in 2010. Duguid wanted to make sure the company’s executives were still happy with that choice. “We had a fantastic meeting with them,” Duguid says. “What they’re really impressed with is the talent that’s evolved here.”
The talent and, Duguid might have added, the tax breaks too. Ontario offered Ubisoft some $263 million in incentives over 10 years to set up shop in Ontario, according to the Toronto Star. The company also benefits from a 37% labour tax credit available to all video-game developers in the province.
It’s the kind of package studios in B.C. can only dream of. Though long considered the heart of the Canadian gaming industry, Vancouver has been slipping fast in recent years. Montreal surpassed it in terms of total companies and jobs some time ago. Ontario’s Golden Horseshoe is coming on fast. The reasons, critics say, are simple: Ontario and Quebec are offering better tax incentives—B.C.’s labour tax credit for the industry is only 17%, for example—and their politicians are making efforts (like meeting with French CEOs in the summertime) that B.C. officials just aren’t. Sky-high commercial rents in Vancouver aren’t helping, either.
There’s plenty of evidence that Canada’s gaming industry is fleeing the West for greener pastures. Ubisoft closed its Vancouver studio early this year, not long after the one in Toronto got off the ground. Rockstar Games, another major developer, announced it was shuttering its Vancouver operations in July. The company is consolidating Canadian development in Oakville, Ont. Radical Entertainment, meanwhile, one of the cornerstones of the Vancouver industry, all but ceased to exist in June when its parent company laid off 89 Vancouver employees. Things are so dire, says Jared Shaw, the founder of 31337 Recruiters, that he hasn’t filled a single video-game position in B.C. in nearly three years. “My job,” he says, “has been exporting people to the U.S. and out east.”
But not everyone believes that B.C. gaming is on the brink of death. The industry as a whole is shifting away from consoles, like Microsoft’s XBox and the Sony PlayStation, and toward social and mobile platforms, like the iPad and Facebook. As it does, traditional companies like Rockstar and Radical may struggle. But Vancouver, with its deep wells of talent and proximity to Asia and Silicon Valley, could still compete for the next generation of firms.
There’s some evidence that’s already happening. Gree, a big-name Japanese mobile developer, started hiring staff for a Vancouver studio in July. Local startups, meanwhile, are popping up every month. Many are staffed with at least a few veterans of Vancouver’s once thriving console scene. Almost all are hoping to hit it big with the next social or mobile sensation. “The best thing to ever happen to the Vancouver indie scene is that those big, fat, bloated old bitches left town,” says Jason Bailey, the CEO of East Side Games, a local mobile startup, of the traditional console giants.
But social and mobile firms aren’t as large or as lucrative as the console players—at least not yet. And without a Rockstar or a Radical to anchor the local industry, some worry the next generation of Vancouver talent will have nowhere to learn its craft. If B.C. wants to keep its status as a gaming hub, says Elliot Siemiatycki, a researcher at the University of British Columbia, the province needs to step up. “Vancouver can’t rely on its mountains and ocean view to attract people,” he says. That doesn’t necessarily mean increasing tax credits, although Siemiatycki does think that would help. It does mean, however, making a visible, viable effort to keep the firms the province has left, while fighting Ontario, Quebec and the rest of the world for the ones still looking for potential homes.