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Canada Video Game Industry: Argument Over Merits Of Subsidies Heats Up (POLL)

Should video game makers be subsidized?

That’s the question at the heart of a debate that exploded in Canada’s gamer community this week after a Maclean’s column asserted that the hundreds of millions of dollars provincial governments have ponied up to bring video game makers to Canada is a waste of money.

The assertion has angered gamers and developers alike, with many taking to Twitter to denounce Jesse Brown’s Maclean’s column. But beyond the personal repartees lies a heated debate about the role of government in the development of private industries.

In a column entitled “Grand theft tax break,” published on Tuesday, Brown asserted that the race between provinces to attract video game companies is a waste of money because the industry is highly profitable and the jobs being created will eventually be sent overseas.

“When developing workforces in, say, Bangalore train enough skilled code-monkeys to undercut local coders, the jobs will quickly migrate to India, leaving little of the creative economy behind,” Brown wrote.

Brown also attacked the “dodgy notion that video game jobs are somehow more valuable than other jobs, and that video game technology is somehow a crucial area that [the U.S. and Canada] should lead.”

He added that this amounted to “magical thinking that has convinced American legislators they are in desperate need of unshaven game devs in funny Internet t-shirts” and “also mesmerized our own Canadian policy makers.”

Within hours, Brown’s comments raised a torrent of objections from video game makers and fans alike.

Nathan Vella, co-founder of Toronto’s Capy Games, took to Twitter to denounce Brown.

Others set their sights on debunking Brown’s arguments. On his blog, Peter Nowak, an occasional Huffington Post Canada contributor, argued that the return on the government’s investment in the industry is more than worth it.

According to a recent study compiled by SECOR for the Entertainment Software Association of Canada – to which I contributed some input – the games industry here employs 16,000 people and will generate $1.7 billion in economic activity this year. That’s not revenue, it’s the amount of dough it contributes to the national economy. At that rate of return, the hundreds of millions the provinces have doled out in subsidies will be repaid in short order, if they haven’t been already.

Moreover, the Canadian industry is growing quickly and is expected to expand 17% over the next two years. That means even more employees and more contribution back to the economy.

Nowak went on to argue that subsidizing the video game industry can have a positive social impact, suggesting that video game companies can lead the way in rejuvenating struggling urban neighbourhoods.

In Montreal, this has meant the revitalization of Mile End, a part of town that was quite sketchy prior to Ubisoft’s arrival in 1997. The same happened to Yaletown in Vancouver. It’s already happening in Toronto; one of the first things I noticed when I attended Ubisoft’s studio opening in the Junction area last year were the high-end condos going up right across the street.

Nowak and others also objected to the argument that the “code monkeys” who program the games will soon be replaced by workers in the developing world. Writing at the Torontoist, Jamie Woo argued that subsidies can just as easily create new businesses.

Often dubbed the acorn model, in Vancouver, the presence of companies like Electronic Arts actually bolstered independent Canadian game studios by building a culture that was hospitable for game development, leading to EA employees splintering off to create their own studios, such as United Front Games. Similarly, the award-winning Klei was started by a developer who worked at foreign studio THQ in Vancouver.

Writing at Village Gamer, blogger Tami takes issue with Brown’s characterization of the video game business.

If that article had been about an ethnic group or any type of visible minority, it never would have been published containing the insults and general slurs it does. It is one thing to be angry about something the industry receives, it is another to wipe a wide brush of insult across those who work in the industry.

All the negativity prompted Brown to qualify his comments a little. In the midst of a heated Twitter exchange, he declared, “I like and respect devs and think they deserve their own [Canadian] industry. … Subsidized gigs for foreign firms make that hard.”

And John Michael McGrath at OpenFile adds another point worth considering:

[I]t’s not like subsidizing culture is new in this country. The province and city trip all over themselves to variously fund movies, television, and music—so why should videogames be any different?

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