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Canadian games industry bucking doom and gloom

New figures show that Canada has the third-largest gaming industry in the world, after the United States and Japan

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Studio closings, big layoffs, an industry in turmoil – those are headlines that have all too frequently described the video game business in general, and in Canada specifically.

But the doom and gloom doesn't paint an accurate picture of what's actually going on, according to the Entertainment Software Association of Canada. There are now 16,500 people working full time at 329 studios, up five per cent since 2011, according to a new study from the industry advocacy group.

The employee count is enough to maintain Canada's industry as the third-largest in the world, after the United States and Japan.

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"The press often reports on the studio closures, but they don't often know about the hires in a lot of cases because the studios are always doing those," says ESAC president and chief executive Jayson Hilchie. "We're still growing and that's a good news story."

The past year has seen a number of high-profile closings and layoffs, especially in British Columbia. Last July, Activision announced it was shuttering Vancouver-based Radical Entertainment, while Electronic Arts has over the past few months cut hundreds of jobs in the province as well as in Montreal.

A downturn in the traditional game console business as well as the rise of mobile gaming, for which the big companies have been ill prepared, are generally cited as the causes.

Still, developers and publishers are optimistic about the future, with forty per cent of respondents to the ESAC survey expecting further growth of 25 per cent or more over the next two years. A further 17 per cent of respondents expect growth of 15 to 24 per cent over the same time frame.

The association is on Friday releasing some top-line figures from an industry-wide survey it commissioned from consultancy Nordicity, with the full report being made available later in the summer (note: I was interviewed for my thoughts on various issues).

The industry's contribution to the larger economy was also higher at $2.3-billion, up from $1.7-billion in 2011, although ESAC spokesman Julien Lavoie says different method ologies were used to calculate the amounts. Still, gaming companies are providing meaningful benefits to the economy, generating a further 10,500 indirect jobs. Employees across the industry are also averaging a salary of just $72,000, despite being only about 30 years old.

Mobile games are now the predominant pursuit of Canadian game studios, with 84 per cent working on them. The average team on such games consists of just seven people, with a budget of $300,000 and 156 days of production. Console games conversely cost an average of $8.7-million and require 65 people and 583 days to produce.

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Despite that, the "death of consoles" has been overstated, Mr. Hilchie says, with nearly half of Canadian studios devoting resources to the segment.

"Some of the commentaries about how the industry is changing and studios are closing and consoles are dying, I don't think that's the case at all," he says. "When you see a stat like that you have to think the console market is still pretty healthy."

The console segment is likely to get a big boost later this year with Microsoft and Sony rolling out their respective next-generation devices, the Xbox One and PlayStation 4. If anything, Canadian studios are proving adept at producing games for both consoles and mobile/portable platforms, with big-budget successes such as Ubisoft Montreal's Assassin's Creed and EA Burnaby's FIFA series standing alongside acclaimed indie hits such as Toronto-based Capybara Games' Superbrothers: Sword and Sworcery and Queasy Games' Sound Shapes .

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About the Author

Peter Nowak has been writing about technology for 20 years, with a focus on trends and how they affect the world. He worked at The Globe and Mail between 1997 and 2004 before moving to China and then New Zealand, where he won the award for best technology reporter at the New Zealand Herald. More

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