New Microsoft game studio welcome, but Vancouver still losing digital talent wars

With richer tax breaks, Eastern Canada's production centres continuing to draw talent from B.C.

Last week's announcement of a new Microsoft (Nasdaq:MSFT) game studio opening in Vancouver is good news for the local industry, but industry insiders say it doesn't mean the city is winning its battle with Montreal and Toronto to attract and keep game studios.

Microsoft has quietly been assembling a new team of engineers and animators since the beginning of the year, but only last week lifted the veil on its latest addition to its stable of B.C. game studios: Black Tusk Studios.

The studio already has a staff of 50 and plans to double those numbers within about a year. It's already planning to move because it's outgrowing its current Yaletown location, said Black Tusk Studios manager Mike Crump, a former senior development director for Electronic Arts.

The Black Tusk team will focus on developing a single game.

"Our focus is on triple-A games," Crump said. "That's the equivalent of a Hollywood blockbuster movie – big teams, big budget, big timelines.

"So rather than working on Halo or Fable or Forza, we're looking to build the next franchise. We're fully focused on one game. It's a big project."

The news is sure to fuel speculation that Microsoft plans to launch a new Xbox console sometime within the next year.

Crump would not confirm his team is working on a new game for the Xbox 720, as it has been dubbed, though he did say that the new game the Black Tusk team would be working on will take at least a year to produce.

"I can't talk about Microsoft's platform plans," Crump said. "I can tell you that we are working on stuff that's pushing the edge, technologically."

Console games like Call of Duty and Grand Theft Auto blend gaming with animation and filmmaking, so Crump said Vancouver's strong talent pool for gaming and film and animation sectors makes it a good location for a studio.

Black Tusk will be Microsoft's third game studio in B.C. Another opened earlier this year in Victoria, and the software giant has owned BigPark Studios in Vancouver since 2009.

Microsoft is bucking an otherwise troubling trend of game studios leaving Vancouver for Montreal and Ontario, which offer better tax incentives.

"It's significant because it's Microsoft," said Howard Donaldson, president of DigiBC, which has been lobbying for digital media tax and policy parity with Eastern Canada.

Microsoft's relationship with Vancouver is unique for two reasons. It's a three-hour drive from Microsoft's head office in Redmond, Washington, and Don Mattrick, president of Microsoft's game division, was born and raised in Vancouver and continues to make B.C. his home.

"There's lots of people in Vancouver not only working in Redmond, but also working here, and, of course, Don is in charge of the game studios, so naturally there's going to be a lot of connections that cause Microsoft to work in B.C.," Donaldson said.

"That's different from an independent company that's coming in for the first time. They're going to look at the economics and a whole bunch of other factors. The situation with the level playing field has not changed. We're still going to lose business."

Matt Toner, president of game studio Zeros 2 Heros Media and recent NDP nominee for Vancouver-False Creek, agreed that the local digital media sector still has some competitive disadvantages, but said Black Tusk will at least help slow the talent drain.

"I'll take good news," he said. "Does it actually address any of the underlying problems or challenges? No. But will it help stop a bit of brain drain? Yes. So in the short term – yay." •

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