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With his shaved head, thick shoulders and long goatee, Nathan Walpole looks like a rugby player. But when he plays Halo 2, the blockbuster video game he helped create, he nestles the controller gently in his hands, his fingers flowing from one button to another.

At 27, Mr. Walpole is where every video gamer with an artistic streak wants to be: He is a senior animator at Bungie Studios, a video-game-development house in Redmond, Wash., owned by Microsoft.

He is one of six Canadians - dubbed the Canimators - who played key roles in the production of Halo 2, an Xbox title that earned a record-breaking $125-million (U.S.) in its first day of release last month.

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Like most of those finding success in the booming industry, Mr. Walpole grew up playing video games.

"I loved games in general and loved animation, and I finally figured out that the two can go hand in hand. I saw games as art, more than just programming. There was an opportunity in games to tell engaging stories and create great characters."

Video games are taking over the entertainment industry - the market topped $22-billion (U.S.) worldwide last year, and is predicted to lead all entertainment and media sectors in growth over the next four years - and Canadians are playing a lead role in the boom.

In the past year, about 40 of the top 200 games in North America were made or worked on in Canada, and this country is home to the two largest game-development studios in the world, in terms of employees.

Industry behemoth Electronic Arts, the largest in the world, has its headquarters in British Columbia. At a sprawling downtown Vancouver studio, 1,300 animators and programmers pump out some of EA's bestselling titles, including NHL 2005 and Need for Speed Underground 2.Ubisoft Montreal, which employs 1,000, is Paris-based Ubisoft's biggest game-development studio and the second-largest in the world after EA's Vancouver studio.

Why Canada, and why video games?

Canada's appeal to the booming industry is partly due to the relative value of our dollar and to government tax incentives, especially in Quebec, that refund labour costs.

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But Ron Bertram, general manager of Nintendo of Canada, said video-game companies are recruiting workers and running successful studios here primarily because "you go where the talent is, and there is a lot of talent in Canada."

Industry experts point to a long tradition of research in 3-D technologies and a large number of Canadian universities, colleges and design schools with strong computer science and animation programs. Studios compete for Canadian programmers, typically plucked from engineering and computer-science departments at universities, especially the University of Waterloo, and animators recruited from colleges and art schools, such as Vancouver's Emily Carr Institute.

Mr. Walpole, for example, graduated from Ontario's Sheridan College in 1991, and was immediately hired by a U.S. company.

Angela Stukator, associate dean of Sheridan's animation/media department, said the school is planning courses for next year, concentrating on video-game design to help more people follow in Mr. Walpole's footsteps.

"Our students are increasingly interested in gaming as an alternative to television or feature film," Dr. Stukator said. "There's no question in my mind that the best thing we can do is mount a gaming program - it's just a no-brainer."

Derek Elliott, co-ordinator of the 3-D video-game program at Toronto's Seneca College, said enrolment applications have increased dramatically, from 20 applicants in 2002 for 15 available spots to 150 contenders this year.

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He tracks the salaries of his graduates and said they usually start at about $35,000 to $50,000, although there are elaborate bonus and incentive structures at game-development studios across Canada. These bonuses, usually awarded when a game is released and does well, can bolster regular wages by 25 per cent to 100 per cent of an employee's annual salary.

Steve Bocska is a producer at Vancouver's Radical Entertainment, which has developed a string of hit games over the past two years. Two titles based on the animated TV show The Simpsons and the TV show The Hulk have sold eight million copies. But he laughed when asked whether he has a Lamborghini in his driveway. "I still ride my bike to work."

Game developers typically put in long hours, especially during the "crunch times" as teams get new games ready for release. Teams working on one video game can run up to 100 workers, usually evenly split between animators and programmers, with a smaller number of audio specialists.

Animators such as Mr. Walpole draw the visual elements of the game, the characters and their environments. He provided 90 per cent of the animations for Halo 2's hero, the armour-plated marine Master Chief, after sketching his ideas using old-fashioned paper and ink.

"It all goes from paper to pixel," Mr. Walpole said. "I take the character's wire frame and give it a skeleton and the proper controls, so we can move it around like a puppet in 3-D space."

Programmers, who are often referred to as the soul of game design, bring the artists' work to life, providing the computer codes that allow all the visual elements to coexist and interact.

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Most of the new video-game workers streaming out of Canadian schools end up at Ubisoft Montreal or EA Canada, two giant developers engaged in a turf war for talented staff.

Paris-based Ubisoft set up its Montreal studio in 1997, and employs about 1,000 people to create and test a long list of bestsellers, including Tom Clancy's Splinter Cell Pandora Tomorrow and the PC game Myst IV: Revelation. Last week, the studio launched another blockbuster game, Prince of Persia: Warrior Within. But instead of holding a celebratory event in Montreal, Ubisoft organized a road trip to Vancouver - in part to woo students at B.C. schools.

"We are working very tightly with schools to develop more talent for video games," said Martin Tremblay, Ubisoft Montreal's president and chief operating officer.

"The market has grown faster than the training institutions. When this happens, then we have problems finding talent locally."

Ubisoft Montreal, however, was only returning the favour by invading EA Canada's backyard. Electronic Arts corporate spokeswoman Trudy Muller said her company opened a studio in Montreal this past year because it "saw so much talent there and we didn't want those people to have to leave their native area to relocate to Vancouver."

EA said its Canadian operation is responsible for $1-billion (U.S.) in revenue this year, one-third of its total.

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EA Canada has added 300 full-time employees to its development operations since April and has plans to hire 200 more by the end of its fiscal year. "We always have a million ideas for games," Ms. Muller said, "but not enough people to work on them."

A number of medium-sized developers are using windfall profits from hit titles and series to launch ever-more ambitious games and to hire the talent necessary to create them.

Edmonton's BioWare, founded in 1995 by two Alberta doctors, Ray Muzyka and Greg Zeschuk, has benefited from a steady parade of bestselling games, from the PC cult favourite Baldur's Gate to its blockbuster Star Wars title.

"The video-game industry is a very hit-driven business - games these days cost in the tens of millions of dollars to develop and market, and games which sell less than a million units per title are usually deemed commercial failures," Dr. Muzyka said. "The games we have developed have sold over 10 million copies in total so far, most of them in the past few years."

Digital Extremes, meanwhile, is an independent developer founded by James Schmalz, a University of Waterloo engineering grad. He designed a popular pinball video game in the 1990s and runs studios in London, Ont., and Toronto. When the company released the computer game Unreal in 1998, it sold millions of copies and spawned a series of best-selling titles. Digital Extremes is using part of the proceeds to work on another ambitious game, Pariah, set for release in March.

"When you hit it big, you hit it crazy big, and that's what, hopefully, Digital Extremes is like," Mr. Schmalz said. "Because we're independent, that's what we all hope for. Obviously, if we do have a success on the scale of Halo 2, then everybody will do incredibly well."

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Mr. Schmalz said Digital Extremes has about 60 full-time employees and adds seven to 10 more people each year.

The Digital Extremes story is one you can hear, in slightly different forms, from development studios across Canada, including Silicon Knights, based in St. Catharines, Ont.; Vancouver's Digital Eclipse and Montreal's A2M and Microids.

Buoyed by profits from successful games and the predicted growth of the global market, executives at Canadian companies say they hope to attract some of the homegrown talent that has left the country to work in the U.S. and Europe.

Bungie's Mr. Walpole said he is "very tempted" by the growing industry in Canada. Employment options have multiplied since he left for the United States, he said, adding that he heard about Digital Extremes opening, practically in his family's backyard, only after he accepted his first job in Utah.

"I miss home," he added. "I travel up to Vancouver whenever I can - just to get Tim Hortons."

For now, however, he is staying put with his fellow Canimators at Bungie. "We recognize that we're adding ourselves to this portion of the entertainment industry, just like Canadian actors did with film."

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