Photo from the game Secret Ponchos, by Vancouver’s Switchblade Monkeys - a developer that benefitted from Execution Labs’ Finishing Fund.

Video Games: Canada’s Creative Industry Giant

Canada’s video game landscape is teaming with talent and launching games at a higher rate per capita than any other country in the world. It’s a vibrant sector, recognized internationally for the quality and creativity of its products, which include massive global franchises like Ubisoft’s Assassin’s Creed and EA Sport’s FIFA soccer.

In fact, the gaming industry ranks third behind only the U.S. and Japan in terms of total production, and according to the Entertainment Software Association of Canada (ESAC), contributes $2.3 billion annually to Canada’s GDP, mostly from export sales.

“In Canada we’re known internationally for our natural resources, like oil and lumber, but the digital media space and gaming in particular is a resource that is growing and growing fast,” says Christa Dickenson, Executive Director of Interactive Ontario, a trade agency dedicated to growing Ontario’s digital content industry.

“Across Canada, games account for nearly 17,000 full time jobs – high quality, high paying jobs – and we’ll only see those numbers multiply as the industry continues to develop. It’s really a part of our economy that Canadians can be proud of.”

Not only is the sector growing, but it is also evolving, adds Dickenson. Games are being used in different ways now, beyond just serving as a fun pastime. There are now prescriptive video games, like Ubisoft’s Dig Rush, which was created to medically treat people with “lazy eye.”

Activism is also starting to appear in gaming, as developers are using digital worlds as a platform to get opinions across and shed light on issues. Bloom Digital’s Long Story, for example, is a game about navigating teenage life; it is designed to model good boundaries, encourage healthy intimacy and prevent bullying, harassment and assault.

So the industry is changing as it grows, and Canada is one of the leaders in that charge.

Dickenson gives three reasons for this success: top tier academic institutions churning out talented technicians and designers; strong storytelling ability, which carries over from Canada’s legacy as creative movie and documentary filmmakers; and finally, ideal business conditions for entrepreneurial growth, thanks to provincial tax breaks and other forms of financial assistance that are readily available.

But even with favourable business conditions, developers still face challenges bringing games to market.

“Probably the biggest challenge for up-and-coming developers is gaining access to early-stage financing. Banks, institutional investors, and even angel investors tend not to get involved in games because they see them as too risky. As a result developers are forced to bootstrap or take on second jobs to fund their endeavours, which can interfere with the development process,” says Jason Della Rocca, Co-founder of Execution Labs, an industry accelerator and investment platform for game developers.

“Also we’ve noticed that a lot of game developers lack the entrepreneurial training to successfully navigate the industry and bring their games to market. They might have this amazing product to offer but without knowledge of the business, it’s difficult for them to get the most out of their game.”

Luckily there are a number of resources that developers can use to “level up,” to borrow a popular term from the gaming world. Here are some of them:Level-1

Level 1 – Develop your first title and get in the game

FUNDS
ACCELERATE
  • Execution Labs – Incubator/Accelerator program based in Montreal provides developers with the guidance and resources they need to realize creative independence.
  • Digital Media and Gaming Incubator – Created by George Brown College, the program offers developers affordable working space, as well as business services, technology and HR support.
ENGAGE
  • GamePlay Space – a co-working place for the game industry in Montreal
  • Bento Miso – a co-working place for the game industry in TorontoLevel-2

Level 2 – Game launch sequence, engage!

FUNDS
ENGAGE

Level 3 – Keep the lights on and furnish the office

FUNDS
ENGAGE
  • Canadian Events – MIGS, GameON Ventures, Ottawa International Game Conference
  • International Events – GDC, Gamescon, E3, look for B2B events with the TCS

Power-upPower Up with EDC insurance. Think about taking on service contracts, or work for hire, with payments against completion. EDC can insure contracts so you don’t need to worry about not getting paid, and if you need access to money sooner, consider factoring – when a lender purchases your receivable so you can get paid sooner.

Level 4 – Time to hire a CFO and buy a slide

FUNDS
  • BDC – Canada’s business development bank and the only financial institution dedicated exclusively to entrepreneurs, it offers financing and consulting services to help businesses grow both at home and abroad.
  • Financing from Canadian banks – After a couple years of being cash flow positive and some demonstrated success in raising funds and delivering titles, you can increase your bandwidth. Canadian Banks can offer financing solutions to help you balance cash flow and grow your capacity. They can look at leveraging your receivables from clients, tax credits, and government funds to help you finance production.

Power-upPower Up Financing your production helps you get a better deal with a publisher, and a great split of revenue.

Categories Technology & Telecom

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