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Ontario Premier Dalton McGuinty, left, Sandra Pupatello, Minister of Economic Development and Trade, and Yannis Mallat, CEO Ubisoft, appear at a Toronto press conference on Monday, July 6, 2009, announcing a new video game studio in Toronto, to create 800 jobs in Ontario.

Derek Oliver/The Canadian Press/Derek Oliver/The Canadian Press

They wear the label of made-in-Canada video games.

"Scrabble" for the iPad tablet and iPhone and "Assassin's Creed" and the upcoming "Tales from Space: About a Blob" for game consoles are among the many examples of home-grown talent.

Canada is among the world's top video game developers, with creative talent and government tax breaks attracting both global and independent studios whose products appeal not only to hard core players but the growing ranks of casual gamers.

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"What makes us stay here is the talent that we have found because the war is going to be won on the quality of the titles," said Ubisoft Montreal CEO Yannis Mallat.

But nobody questions that tax breaks have helped the industry grow.

French-based Ubisoft first arrived in Montreal in 1997 with the help of tax incentives from the Quebec government. It now has 2,300 employees in Canada.

Ubisoft Montreal is known for developing the action-adventure games "Assassin's Creed" and "Splinter Cell," among others.

Next up for the Ubisoft Montreal studio is the interactive fitness game, "Your Shape," which has technology to scan a player's body and track movements. It will be released this fall for Microsoft's Xbox 360 console.

"In real time, you will have a coach with you," Mallat said of the game, which will help players with their fitness.

"I think if we design games in a good way, we can appeal to a much wider audience," he said at Ubisoft's headquarters.

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Canada is ranked as the third-largest video game developer behind Japan and the United States, says the Entertainment Software Association of Canada.

More than 14,000 people are directly employed in the Canadian industry and in 2009 it accounted for more than $2 billion in retail sales of entertainment software and hardware, the association said.

Independent developer DrinkBox Studios has announced it will be launching its first original game, "Tales from Space: About a Blob," late this year for the PlayStation3 system. The monster movie-themed game is about creature that grows until it eats the world.

DrinkBox co-founder and CEO Ryan MacLean said the Toronto-based company has been working on the game for almost two years while also doing projects for larger studios.

"There has obviously been a lot of support from various levels of government and that has been extremely helpful for us," MacLean said of DrinkBox, which has about 10 employees.

"We have made use of a number of grants and tax credits and other government programs. It gives us a competitive advantage over other countries."

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Wedbush Morgan analyst Edward Woo noted tax breaks have helped Canada develop its video game industry.

"Canada has been a popular location for developers because of government subsidies, which started in Quebec and now are following through in other provinces," Woo said from Los Angeles.

But such subsidies aren't viewed as negative because they help the industry grow, said Woo, who specializes in media and interactive entertainment.

"Scrabble" for Apple's iPhone and iPad were developed by Electronic Arts Canada's Montreal studio, which has an expertise in mobile platforms, said company spokesman Colin Macrae.

EA Canada also is known for developing the FIFA soccer series, space action series "Mass Effect," and action game "Army of Two."

"Casual games have helped redefine the industry as a whole, not just being a single-player, couch-based experience," Macrae said from Vancouver.

U.S.-based Electronic Arts acquired B.C.-based Distinctive Software in 1991, which officially launched EA in Canada, Macrae said. EA Canada has about 2,500 employees.

Macrae said tax incentives and post-secondary education programs geared to the video game industry are among factors that help.

"The long-term success comes from having really, really strong pillars that hold up the industry."

However, Woo said Canada's third-place ranking isn't overly significant when compared with the big markets of Japan and the United States. He said Canadian games are generally for consoles.

He also said Canada is viewed as a more traditional video game developer, producing games for major consoles.

Warner Bros. Interactive Entertainment has announced it will open a development studio in Montreal that will employ more than 300 people by the end of 2015.

Warner has said Quebec is a perfect fit for the company with its skilled workforce and universities, as well as its tax credits and other incentives.

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