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Ontario Premier Dalton McGuinty is counting on the three quarters of Canadian adults who play video games to help transform his province's ailing economy into a leader in the fast-growing digital media industry.

His government is investing $263-million over 10 years in one of the world's largest video game publishers as part of a push into the digital media business. The funds will help French company Ubisoft SA set up a studio in Toronto that will produce, publish and distribute video games. Ubisoft will invest more than $500-million in the studio, which will begin operating later this year and create 800 jobs over the next decade.

Mr. McGuinty has been trying to lure Ubisoft to Ontario for the past three years as part of his plan to offset the loss of jobs in the province's manufacturing heartland with technology-based, creative companies.

At a news conference Monday, Mr. McGuinty said the multibillion-dollar entertainment industry is growing fast even during the global recession, and Ontario wants a bigger piece of the action. The gaming industry is rivalling the film industry for sales, with nine video games sold every second in North America. Among the 75 per cent of Canadian adults who play video games, the average age is 40 and half are women, he said.

“This isn't kids' stuff and it isn't child's play,” Mr. McGuinty said. “It is a very serious business.”

Ubisoft has grown rapidly since its founding in 1986, with 22 studios in 17 countries and sales of 1.058-billion euros ($1.7-billion Canadian) in the fiscal year ending March 31, 2009. It's game titles include several best-selling games based on the Tom Clancy spy novel Splinter Cell as well as the Prince of Persia series.

The company opened a studio in 1997 in Montreal, where it has 2,200 employees. It also expanded into Vancouver in February with the purchase of Action Pants Inc., an independent studio with more than 110 employees.

Mr. McGuinty said Ubisoft will have to meet rigorous conditions to get the provincial financing, including allowing government officials to examine the company's financial records every quarter to ensure that jobs are being created. He said the province will make a return on its investment through the new jobs, tax revenues and spin-off ventures.

The investment does not mean the government is choosing winners and losers, Mr. McGuinty told reporters. Rather, he said, his government is looking to the digital media business, where growth is eclipsing that of the traditional media sector, to help the province weather the economic recession and ease its transition away from manufacturing, where more than 200,000 jobs have vanished in recent years.

“We know it's a sure-fire winner,” he said.