Montreal’s booming video game industry is poised to profit from Vancouver’s video game talent base, which has been rocked by 1,500 layoffs since the fall of 2008, including those from the recent closure of Disney Interactive Studios’ Propaganda Games.
“There definitely is a flow of talent to Montreal and not just from Vancouver – really from many different locations because of their tax credit program,” said local digital media and wireless association DigiBC president Howard Donaldson, referring to Quebec’s 37.5% tax credit on labour costs in the video game industry.
Donaldson said Vancouver’s video game industry currently employs 3,000 people. And while he argued that things are turning around in the local industry, with a new 17.5% provincial tax credit on labour costs for producing interactive digital media in place since last summer and 300 new jobs anticipated this year, the numbers are well short of the job growth anticipated in Montreal.
Marie Claude Bernard, communications and public relations director for Montreal’s new media and interactive digital content association Alliance Numérique, said Montreal anticipates that its current 7,000 jobs will grow by 1,200 annually for the next three years. The city, she said, is anticipating a talent shortage for senior programming and design positions.
“We’re working on trying to patch the gap,” she said, noting that Alliance Numérique is putting together a digital centre to accelerate advancement possibilities for locals and looking to attract talent from outside Quebec.
Electronic Arts Inc. (EA) (NASDAQ: ERTS) spokesman Colin Macrae said that from the perspective of a global video game company like EA, Vancouver and Montreal share key qualities: a strong talent base, the livability to attract and maintain that base and schools aligned with the industry’s goals.
Where they differ, he said, is on the economics of video game creation. Macrae said that over the past few years, B.C. has felt the squeeze of rising competition from other North American jurisdictions offering increasingly competitive tax credits to attract industry players.
“[In B.C.] it’s the economics of doing business that is under siege.”
The tax credit available in Montreal combined with the talent pool, he said, was a strong reason for EA’s decision to open a studio there in 2004; that studio now employs 800 people.
Macrae said EA’s Vancouver area staff is currently 1,200; he declined to provide its peak headcount.
Steve Couture, CEO of Quebec City-based Frima Studio, recently gave a presentation to the Canadian Club of Vancouver arguing that Canada’s video game industry needs to focus on developing Canadian intellectual property or the Canadian industry will remain vulnerable to mass layoffs and other bottom-line choices of multinational companies.
“If we look at it right now, yes, Montreal has a lot of jobs, but in the future, probably something will affect the Montreal industry if development gets cheaper somewhere else where there’s a lot of talent,” he said.
As to Vancouver’s video game professionals, he said Frima, like many companies in Montreal, would be more than happy to absorb some West Coast talent.
But Donaldson argued that Vancouver talent is unlikely to be lured east in any kind of volume unless local opportunities dry up completely.
“People on the West Coast generally want to stay on the West Coast.”
Redwood City, CA
CEO: John Riccitiello
Employees: N/A
Market cap: $6.8b
P/E ratio: N/A
EPS: ($1.20)
Sources: Stockwatch, NASDAQ