Canadian Video Game Studios

Here's a handy link to Canadian video game studios, organized by province.

Videogame Production in Canada

The Globe and Mail has an interesting article about the state of the videogame business in Canada, including a detailed look at the Ontario government's actions to bring a game publisher to Toronto.

The Vancouver video game business began organically. Distinctive Software Inc. was founded in the early 1980s and scored success, and in 1991 was bought by Electronic Arts. From this foundation, about 60 companies – employing 6,000 or so people – now call the city home, according to numbers from an industry association report published in March.

Video games aren't a particularly big business, with about $1.7-billion in annual revenue in Canada, a fraction of what Royal Bank of Canada or Research In Motion Ltd. generate. However, the industry captures the imagination of politicians, who see high-paid, high-tech jobs. Ontario has been specifically inspired by the “creative cities” thesis of Richard Florida, a University of Toronto professor and consultant to Queen's Park.

The success of Vancouver in the 1990s attracted attention elsewhere. Like Ontario today, Quebec in 1996 introduced significant subsidies to spark growth and, with the tax breaks, lured Ubisoft in 1997. Electronic Arts arrived in 2004. There are now about 4,400 people working in the business at more than 40 firms in the Montreal area. Quebec City has another 600 people at five companies. Ubisoft, with 2,200 employees in the province, mostly in Montreal, plans to add another 800 in the next four years.

Toronto, even with specialized video game education at colleges like Humber and Seneca, has only about 1,300 people working in the business, though at more companies, 65. A plane ticket to Vancouver, Montreal or California after graduation in Toronto isn't unusual.

Ubisoft Opening in Toronto

(Updated. Here's an interview with Yannis Mallat, who will be in charge of the Ubisoft Toronto facility. Thanks to Alan Cook for the link.)

This will only be of interest to those working in animation in Toronto, but Ubisoft, the French videogame company, will be opening a studio in Toronto.

I personally don't have much interest in games, but I do have a strong interest in the Toronto industry. For years, it has been anchored by Nelvana, which not only employed people but also subcontracted work to smaller studios in the city. More recently Starz has been working on features and has managed to keep a steady stream of work for its crew.

A few weeks ago, I had lunch with several industry people and they asked me how I saw Toronto's future for animation. I wasn't optimistic. The TV industry is shrinking and budgets are being pushed lower as a result. While there is also visual effects work for features being done locally, that business has notoriously low margins and studios are quick to underbid each other for work.

My thinking was that Vancouver was better positioned than Toronto for several reasons. It has a big geographic advantage in that it's in the same timezone as California and is a shorter flight for executives and directors than the flight to Toronto. Most importantly, though, it has video game company Electronic Arts in addition to TV, feature and VFX work. Vancouver's greater diversity of work made it stronger than Toronto.

Now, Toronto will be at least as diverse as Vancouver. Should Nelvana, Starz and Ubisoft remain strong anchors for employment, it will keep talent in the area rather than have it wander off to greener pastures. While this announcement may not have the public relations value of Pixar opening in Vancouver, it is as important in stabilizing the local industry.

Unfortunately, two of the three anchor companies are not Canadian. What would really solidify things would be for Toronto-owned studios to create intellectual property that's sold around the world. Should that happen, the industry would be much better positioned for growth.

(Thanks to Paul Teolis for the link.)

The State of the Gaming Industry

Slate has an article on this year's E3 conference and the state of the gaming industry.

"To the extent that games provide consumers with engaging interactive entertainment for $60—sometimes 100 hours' worth as in the post-apocalyptic Fallout 3—it's an industry that deserves to fly high in the recession. But the game industry has fired nearly 12 percent of its work force since last July (8,450 folks), according to Wanda Meloni, an analyst at M2. There may be more to come, too.

Beyond closing 13 game-development studios, video game publishers are tightening their belts while, at the same time, desperately trying to show how extravagant they can be by spending millions on parties with famous bands, fancy convention booths, and movie-award-like press conferences at E3, the lavish yearly games convention in Los Angeles that's more like a boisterous, barker-filled state fair midway than a business gathering."

That layoff percentage above implies that the gaming business recently employed over 70,000 people. Not all of those would be artists, but has the gaming industry surpassed features and TV series as the largest employer of animation artists?

What's Killing the Videogame Business?

(UPDATE: Variety reports that Midway Games, makers of Mortal Kombat, filed for Chapter 11 bankruptcy protection on Feb. 12.)

Slate has an interesting article on the state of the videogame industry. While sales are rising, budgets are rising faster. That's leading to financial losses and layoffs.

The development cost of a game is now in the area of $40 million, which is the cost of a mid-range animated feature. The gaming industry is pursuing a Hollywood model, hoping that blockbusters make enough money to offset losses on other releases. I'm not sure how smart it is for anyone to raise the stakes in a time of economic uncertainty.

I'd love to know how many artists the gaming industry employs relative to TV and feature animation. It's possible that gaming employs more than the two of them put together. If that's true, I hope that the game producers know what they're doing.