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What's Really Going Down in Vancouver?

With studio closures and layoffs, what was once the central city for game development in Canada is currently on the ropes... Or is it? Gamasutra investigates the fate of the city's scene, talking to developers about what's going on and what can be done to save the local industry.

Leigh Alexander, Contributor

August 17, 2012

11 Min Read

It's been a devastating summer for the game industry in Vancouver, as major publishers closed studios there: Activision gutted Prototype developer Radical Entertainment, while Max Payne 3 studio Rockstar Vancouver up and relocated to an expanded facility near Toronto.

That's far from the extent of it: Ubisoft also closed its Vancouver office, while Capcom, Slant Six and Relic saw layoffs. This city, once such an active game development hub, is seeing massive challenges, and the threat of a talent drain to currently-thriving Montreal and Toronto, where attractive tax incentives are helping compound Vancouver's challenges.

"Back in the glory days of gaming, Vancouver was Canada's 'it town' where things were happening," says Shane Neville, who has spent 15 years in the city's game industry, with companies including Electronic Arts, before going indie. "People were moving here from all over Canada for jobs. With the oil jobs in Alberta and the incentives in Quebec and Ontario, things are going the other way now."

These factors, plus increasing challenges for so-called "mid-tier" console developers, have combined to leave an entire dev community high and dry, and many fear that a lack of government support alongside incredibly high real estate prices may constrain the flourishing of new small studios that usually follows layoffs at bigger ones.

Vancouver's Matt Toner is a game and transmedia industry veteran, professor at the city's Center for Digital Media, and founder of entertainment tech firm Zeros 2 Heroes Media. This year, he's emerged as an advocate for Vancouver's game industry -- and he's running for public office.

Toner says that at the core of the Vancouver industry's current crisis is the fact the government doesn't understand its needs, and just lobbying won't help within a complex bureaucracy. "One of us" is needed at the administrative level, he believes, and he also worries that the government doesn't have a plan to save Vancouver's interactive entertainment industry.

"Games are a big part of Vancouver's ecosystem for innovation," Toner tells Gamasutra, citing the city's history of diverse "screen-based" entertainment, which includes film, television, and mobile entertainment as well as games. Having also lived and worked in New York City, where a traditional triple-A industry has also struggled to take root, Toner says there are major parallels.

But New York has a plentitude of the three elements Toner views as essential to driving this industry: Clients, talent, and capital. "In Vancouver, we have a lot of talent. Clients, not so much, and capital is in short supply," he says.

"There are two things that result from that: New companies can't raise the money they need to really get going, so they flounder around, and more die than probably need to die," Toner says. "On the other hand, there are bigger companies that have been here -- EA has been an anchor locally -- but the next [size] level down, Rockstar, Radical, Nexon, Relic, Ubisoft Vancouver, have been rotting away pretty quickly."

The landscape of Vancouver has also been affected by the increasing shift in importance for the mobile and social spaces, a trend that's also seen mid-tier console games vacated. "These mid-size companies have been bought by U.S. companies, or other international companies, and what happens is you become a branch plant as opposed to being your own little shop... When you're being managed by a U.S. or a Japanese company, your fate is decided by a spreadsheet."

Meanwhile, more attractive tax schemes are making Montreal a lot more attractive for companies wanting to do business in Canada, with Toronto learning from its example and following suit. "[Ontario] gave Rockstar a sweetheart deal," says Toner of Rockstar's expansion in Toronto at the expense of the Vancouver facility.

Even the film and television arenas are starting to be outbid by other places eastward, says Toner. Vancouver's crediting scheme is under enormous pressure, he says -- it's only half of what's available elsewhere, but at the same time it's significant enough that the government wants to closely control where the money's going.

Toner also says the tax scheme is "queerly worded," and the net effect of all that is that small companies have a hard time actually accessing the money meant to be laid aside to help new interactive entertainment businesses break ground. If more resources were allocated to small businesses it'd be a good start in helping pull Vancouver back from the brink.

And it's not just tax cuts that will help: An infrastructure that enables access to investors and actual startup business advice and counseling would work wonders, Toner believes -- noting many indies establish studios on their dev expertise without necessarily being strong in entrepreneurship. Support in those arenas could pay big returns on a relatively small investment, he suggests.

Toner sees a role in politics as an extension of the systems analysis that game designers already take to. Work with a lobby group didn't go far enough, and he saw friends fail to make an impact through community leadership roles. But the situation could get critical if someone doesn't do something soon, he says.

When he speaks to his former students, most of them have gone to other cities, and those that are still in Vancouver are struggling. "We've got these talented young people and we're training them and then they're draining away. And in the case of Rockstar, we're exporting them."

There isn't even enough data to know how bad things are, but a pulse check seems dire, according to Toner. "For the first time in years, the city of Vancouver is helping to do a benchmark study," he says. "It's appalling the lack of data we've got. But anecdotally, from talking to studio heads in town -- they did a big survey at the [industry's] peak -- I was told we had 60 viable game studios there. Now, there are maybe 20 studios that can meet payroll consistently. If that trend is remotely true, that's terrible."

The local community is tech-savvy, progressive, and ready to help, and so is the city mayor, "one of the guys who gets it," Toner says. They just need the government, which he characterizes as too preoccupied with holding onto power and playing politics, to hear them out.

Meanwhile, the city's local dev culture and priorities have begun to shift in complex ways. "Any time lots of jobs leave a community, the community is hit," says indie dev Shane Neville. "While I haven't seen any other indies directly affected by the cuts, we all see some of our friends moving south to work in the U.S., or east to go to Ontario or Quebec."

And the startup culture that usually sprouts in the wake of layoffs is challenged by what Neville describes as "heated" bidding for what incentives are available. "It used to be that nobody talked about what studio got funding from the Canadian Media Fund, but now every time winners are announced, you hear people congratulating each other or complaining," he observes.

Even though it has a talent base that has expertise in triple-A development, in his view the Vancouver community skews in background toward the work-for-hire games development culture. "With more studios being wholly owned by the publisher, or being start-ups, the service work mentality is a very hard one to be successful with," says Neville.

He also sees the community as being resistant to free-to-play, clinging to dependency on publishers and hesitating to explore new business models crucial to vital communities. And he's also observed another change: Now the priority is budget, not quality.

"At the end of the year, you would see the display cases fill up with awards and plaques. Once the [U.S.] dollar reached parity, there was a lot more focus on getting it done on budget at a lot of the studios," he reflects. "Vancouver studios still make very good games and the occasional hit, but we used to consistently make a lot of great games."

With a high profile indie title, Retro City Rampage, almost out, Vancouver's Brian Provinciano has founded his own company, VBlank Entertainment. After finally gathering the courage to strike out on his own, he says he loves the city and there's nowhere he'd rather be.

"It's a gorgeous city, surrounded by mountains, water and trees," he enthuses. "Everything within the downtown core is walking distance. I've had times where I would work all morning, then go for a run or skate down the seawall, a trail that wraps around the city with the freshest air and nicest view, then return to the office for a second shift. It's a great way to get fresh air while giving your eyes a rest from the screen for a bit to enable working longer days."

He also says that despite heavy losses to Vancouver's industry, he hasn't lost his indie family. One of his fears in going indie was that he'd lose his support network of friends and colleagues, but not only has that not happened, but his network has increased as locals have rallied around an event called the Full Indie Meetup.

The Full Indie Meetup started with two developers, Grey Alien Games' Jake Birkett and Rocket Bear Games' Alex Vostrov, kicking around the idea of a Vancouver indie gathering on Twitter. So many responses came pouring in that the event quickly outgrew its coffee shop venue. 100 indies now meet every month with 50 waitlisted, and Provinciano says the mailing list has about 1000 members in total.

This tight-knit community means layoffs and relocations hit people especially hard, Provinciano says. He believes that these experiences have deepened the community's resolve and given some of his friends that last push of inspiration that's so oftne needed to try to make it on one's own. For his part, he's enthusiastic about what so much talent forged at triple-A studios can contribute to increasing the quality bar for Vancouver's indie games.

However, Provinciano also says he's a firm believer that large studios remaining open is key to keeping Vancouver's indie community healthy, as he himself learned essential core skills through his time at traditional dev jobs, and feels that experience forms an important foundation.

New graduates may not be able to find the triple-A jobs they hoped for, though. Those devs might end up shifting their attention to attainable mobile gaming goals, though, thereby supporting the city's necessary transition to a base in that arena.

There'll be jobs in emerging markets, though: Amid all the closures, the fact that Japanese mobile giant Gree has just opened a new free-to-play studio in Vancouver is a bit of bright news. OpenFeint and Google veteran Steve Lin has been tapped to head the new Gree facility, and says the base of talent available in Vancouver is part of why the company chose it.

"When we looked at where we could find an existing base of talented individuals and a city where we could recruit people to live, Vancouver made the most sense," says Lin. "It certainly helps that it's on the West coast, same time zone and a short flight from our San Francisco North American headquarters."

Lin has observed many smaller studios in the city making the necessary shift from being an outsourced triple-A partner to experimenting with mobile development. "Our office would like to help foster and support that emerging independent development community," Lin says, adding that strong third-party development will be key to the success of an open platform like Gree's.

"One of the main goals for our studio was to minimize the 'landing party' from our home office and hire the vast majority of our team locally," says Lin. "We feel that there is a lot of room to innovate in the mobile/social space, and are looking for game developers in Vancouver to help us take things in new directions... We would hope that our investment in the city demonstrates our belief that the talent in Vancouver can adapt to wherever the market may go."

All told, Vancouver does have significant challenges ahead: getting educated government support, stemming talent drain, supporting up and coming businesses and successfully shifting its skill base away from mid-tier console and work-for-hire, and more to mobile and social development. But a passionate dev community that loves its city, outspoken advocates like Matt Toner, and investment from companies like Gree provide hope that Vancouver can get what it needs to stage a renaissance in the coming years, if all falls into place.

"Vancouver is a beautiful city, where 10 years ago film, TV, and games were up and coming," Matt Toner reflects. "There are enthusiastic people with excellent ideas, and it's worth making a try. If we don't defend the things we love, politics could mismanage us into the Stone Age... We have to stop these guys, and really try to turn things around."

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About the Author(s)

Leigh Alexander


Leigh Alexander is Editor At Large for Gamasutra and the site's former News Director. Her work has appeared in the Los Angeles Times, Variety, Slate, Paste, Kill Screen, GamePro and numerous other publications. She also blogs regularly about gaming and internet culture at her Sexy Videogameland site. [NOTE: Edited 10/02/2014, this feature-linked bio was outdated.]

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