Evolution of the Gaming Industry in Canada

05-04-2022

By alanglois

For many years, Canada has been a leader in the Gaming industry. On the lookout for the latest technologies and in a constant process of innovation, Canadian video game companies must maintain competitiveness at the forefront of the global scene. To do so, members of this industry resort to massive recruiting, increased exports, and the use of subsidies as strategies to maintain their reputation.

This challenge has been brilliantly met so far, and we will explain why in the following article.

Canada: a renowned country in the gaming world

Canada’s fast-growing video game industry is recognized worldwide. ALD, the Entertainment Software Association of Canada, even estimate its contribution to GDP at $4.5 billion. A true pillar of the economy, a key sector for innovation and new technologies, this industry is nevertheless very competitive.

To quote Jayson Hilchie, CEO of ALD: “The video game sector is becoming an economic development priority for many governments around the world […] the continued growth of this industry requires support such as targeted incentives, accelerated immigration programs, and funding for small and medium-sized studios. Canada must continue to do much to ensure its attractiveness and competitiveness with other global markets. “

It is understandable that Canadian government economic policy plays a key role in helping companies in this sector to grow. We are talking about a growth of more than 23% since 2019 (study conducted by the Nordicity Group) during the pandemic, which shows that this sector has not suffered from the crisis and, on the contrary, has been able to benefit from it.

The impact of the pandemic

As we have all witnessed, the health crisis has impacted the lifestyles of everyone, pushing more consumers to spend time in front of their screens for longer periods of time. Indeed, a study conducted by ALD reports that 58% of adults between 18 and 64 years old, and 80% of young people between 6 and 17 years old have increased their video game use since the beginning of COVID.

As an entertainment medium suitable for the entire family, video games have provided many users with an outlet for their entertainment. The social distancing and therefore the “dematerialization” of human interaction has made the need to preserve a link with the outside world vital.

Since the beginning of the pandemic, there has been an increase of nearly 35% in the number of companies in the video game industry. These companies have created a large number of jobs, especially during this period of crisis when it was sometimes difficult for companies in other industries to maintain their employee quota.

An industry that creates job

The video game industry is a demanding one, and companies will need highly skilled workers with expertise in the industry’s specific fields. This same workforce is attracted by the relatively good average salary and the valuation of skills in this sector. Since 2019, there has been a 17% increase in the number of employees in Canadian video game companies. All of these jobs have contributed to the recovery of the overall Canadian economy because of the purchasing power it gives to the employees of these companies.

Due to the volume of jobs in the Canadian video game market, we can now identify a relatively large network, including some of the giants of the industry, such as Ubisoft or Electronic Arts. Associations such as “La Guilde“, of which we, at Leyton, are a proud member, have been created to promote these companies and support them in their growth through various contributions. The interest of this type of association is to obtain for these companies an international influence so that they can maintain their position among the world leaders of this industry. Maxime Gregoire, CEO of Lucid Dreams Studio, supports the importance of this type of grouping within the industry. “The Guild is a testament to the common desire to participate in a great project, and the mutual support and cohesion that unite Quebec studios are noticed abroad. This unique ecosystem is the envy of foreign studios.”

These networks also allow the various players in this sector to help each other by sharing their knowledge and skills. This spirit of sharing is probably one of the industry’s greatest assets, compared to other players on the world stage. As Chloe Lussier, CEO of Lowbirth Games, says, “The caring nature of these Montréal studios contributes to the creation of critically acclaimed games. Montréal is a fantastic city to develop games because of its vibrant community of developers who help and support each other. The products that emerge from our city challenge the status quo, allowing us to shine on a global scale.”

Exporting as a key growth factor

In the era of globalization and the rise of new technologies, companies that want to remain sustainable must open their doors to the international market. The video game industry is truly a global empire, where publishers face fierce competition and user loyalty is becoming increasingly difficult.

Montréal is one of the largest video game production centers in the world. It ranks 5th behind Tokyo, London, San Francisco, and Austin. As Jayson Hilchie says, “The Canadian video game industry is a critical sector for export and innovation. We are bringing our talent to the world stage. Quebec’s expertise in video games is well known.”

The main distribution players are based in California, England, and Japan, which is why it is necessary for companies in the industry to export their products to ensure their international presence. Jayson Hilchie points out that “With 84% of our sales in foreign markets, generating billions of dollars in revenue and supporting tens of thousands of good jobs, it’s safe to say our industry has a global economic impact.”

Government incentives: a key solution

In addition to the desire of video game companies to grow, it is the possibility for more than 20 years to obtain tax incentives from the government, such as the tax credit put in place by Bernard Landry, which greatly encourages companies in their international development.

In addition, government subsidies have attracted companies and played a major role in the growth of the video game sector in Canada. The office of the Minister of Finance explains that the tax credit has encouraged the development of this industry in Quebec and internationally.

As Philippe Brunelle, head of the Trébuchet studio, says, “This incentive, which has attracted international players to our city, has created over the years a whole ecosystem of employers, developers and study programs that today allow Montréal to stand out in the market. “ We can thus understand that the government’s support for companies in this sector, particularly in Quebec, is significant support for their expansion.

Closing Remarks

We can conclude that the video game industry still has a bright future in Canada. This constantly growing sector, even in times of pandemic, has continued to create jobs and export its activities internationally, notably thanks to government incentives.

Do you have a company in the video game industry? Meet with our consultants to discuss your projects and find out how to finance them!

Siréna Baudin

Marketing Executive & Office Manager Montréal