Officials are pointing to a proliferation of small studios to suggest that Vancouver’s video game sector is healthy, but some industry insiders are skeptical.
Over the past 18 months, three of Japan’s largest mobile gaming companies — Namco-Bandai, DeNa Studios, and GREE — have opened studios in Vancouver.
“There is currently a global shift in the video game industry. While AAA console games are declining, mobile and online gaming is on the rise,” said Nancy Mott of the Vancouver Economic Commission (VEC), an agency of the City of Vancouver that supports local businesses.
However, the VEC could not provide detailed statistics to show that small gaming studios have made up for losses at larger studios.
State of the industry
Since 2007, there have been many layoffs at large gaming studios, including Radical Entertainment, Capcom, and Electronic Arts. Other studios have moved entirely, lured by more aggressive tax incentives in Ontario and Quebec.
The media coverage of big studio closings has lead to the false impression that the industry is struggling, according to Richard Smith of the Centre for Digital Media. Set up in 2007 by Emily Carr University, UBC, SFU and BCIT, the Centre offers a one-year professional graduate degree program in digital media.
“Things that are big or unusual get profiled, but things that are small do not typically get noticed,” said Smith.
Minister of International Trade Teresa Wat echoed that sentiment. “It’s wrong to cite any single business decision as a reflection of an entire industry,” she said in a written statement, pointing to the Namco-Bandai, DeNa, and GREE as examples of the industry’s health.
Shift towards mobile
For some, the lack of clear employment figures is concealing the reality of a struggling industry in need of support.
[pullquote align=”right”]AAA console gaming is growing, just not here[/pullquote]“They are cherry-picking their data a little bit,” said Matt Toner, founder of the studio Zeros 2 Heroes. “Their mantra is rah rah, because they need the reality that things are doing well.”
He does not see any empirical evidence to suggest that a shift towards mobile gaming has saved Vancouver’s video game sector. “AAA console gaming is growing, just not here,” he said.
Toner added that if Vancouver simply recovered, it would still be losing market share because the industry is expanding so rapidly elsewhere.
A 2011 study by Secor Consulting noted that the Canadian video game industry was projected to grow 17 per cent in 2012 and 2013, after 11 per cent growth in 2010 and 2011. The study projected 21 per cent growth in Ontario and 16 per cent in Quebec, compared to 10 percent in British Columbia.
Tax policy matters
Indie developers are part of a broader shift towards small to medium-sized studios, but they typically employ far fewer people than studios developing games for consoles such as the upcoming Xbox One or PlayStation 4.
In its April 2013 report on the Canadian Entertainment Software Industry, the Standing Committee on Canadian Heritage noted the decline of major studios based in Vancouver and the rise of smaller companies working on casual and mobile games.
“Statistically, I can’t say that it’s 1:1 replacement, or even close to that,” said Corey Rollins of indie game developer Klei Entertainment.
Developers like Rollins advocate for stronger support from the City of Vancouver and the B.C. Provincial Government.
British Columbia’s video game sector would be twice as large if it had a tax policy like Quebec’s, according to research by Howard Donaldson of DigiBC, which represents digital media and wireless companies in BC. By Donaldson’s calculations, Vancouver lost 5,000 jobs because its tax incentives could not compete with Montreal and Toronto.
The Canadian video game sector directly employs nearly 16,000 people and contributes around $1.7 billion in economic activity, according to 2011 figures compiled by Secor Consulting.