Ontario battles recession with online games

It’s a tired movie stereotype – the unkempt, unemployed dude slouching on the sofa playing a video game.

But the way to beat Ontario’s IT hiring crunch, might just lie in getting more people to vanquish fantasy foes in video games such as Splinter Cell and Rainbow Six or Assassin’s Creed and Prince of Persia.

The video gaming industry could play a vital role creating and sustaining jobs in these tough times, says Gerald Pisarzowski, vice-president, business development at the Greater Toronto Marketing Alliance, (GTMA).

The Alliance helps businesses explore opportunities to invest, expand or relocate to the greater Toronto area.

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The Alliance is a partner of the Ontario Technology Corridor, a private-public initiative that includes some 5,900 companies in the greater Toronto area, the city of London and the Ottawa, Niagara and Waterloo regions.

The corridor is home to more than 256,000 skilled professionals.

Earlier this year, Ubisoft Entertainment, the French video game developer, established a Toronto studio.

The province of Ontario will contribute $263 million to help finance the $800 million investment, and Ubisoft Toronto is expected to begin operations by the end of this year.

The studio will be the company’s fourth in Canada. Ubisoft already has studios in Montreal, Quebec City and Vancouver.

“That move alone is expected to create 800 jobs over the next decade,” said Pisarzowski.

“Toronto’s pool of experienced video game industry and film industry talent will enable Ubisoft to create more brands with universal appeal to extend beyond the world of video games,” said Yannis Mallat, chief executive officer of Ubisoft Montreal and producer of the popular Prince of Persia game series.

While countries like India gain more strength in the IT services outsourcing field, Pisarzowski is convinced the Ontario Technology Corridor can flex its muscle in the digital entertainment world.

Pisarzowski said three factors are driving global tech companies to invest in the technology corridor:

  • A highly educated IT workforce
  • Generous research and development tax credits
  • Low-risk business environments

Tax incentives are crucial to the industry’s growth, according to Ontario video game makers. Some examples of such incentives are:

  • The Ontario interactive digital media tax credit refund of 20 per cent of production cost
  • The Ontario computer animation and special effects tax credits covering 20 per cent of labour costs

And there’s also funding help available to digital gaming entrepreneurs.

For instance, the Ontario Media Development Corporation’s Interactive Digital Media Fund, covers up to $150,000 of project and production costs.

“Such support has helped many brilliant home-grown companies, such including Digital Extremes, Fuel Industries, Magmic Games, Inc., March Entertainment and Silicon Knights develop and create jobs,” said Pisarzowski.

But the Ontario Technology Corridor, he said, is also focusing on bringing in foreign companies such as Ubisoft. “The challenge is to make foreign companies aware of the opportunities here.”

Elsewhere in Canada, another public-private initiative is helping stem the outward migration of young talent.

GamePlan is an economic development strategy that seeks to foster the growth of Prince Edward Island’s gaming industry.

The initiative supports local PEI companies and game developers through a combination of tax and labour incentives and a healthy coordination with local schools.

When GamePlan began in 2003, it sought to create 500 new jobs in the computer gaming sector within five years. By early 2009, PEI had four development studios, one testing facility and about 150 people employed in the industry.

That’s still a big number considering that PEI has a population of 130,000 says Deirdre Ayre, studio head for Other Ocean Interactive.

“Despite the current economic downturn, PEI gaming industry sales are up, companies are interested in Atlantic Canada and we’re attracting many young people,” she said.

Holland College, a community college in PEI collaborates with the University of Prince Edward Island in training students to develop skills needed by the local tech industry.

“By offering career opportunities to PEI’s youth, we hope to keep people on the island if they truly wish to stay,” said Chris Shapely, an artists and designer in the gaming industry and instructor at Holland College.

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