Canada's Entertainment Software Industry in 2011

Key insights

7 takeaways

01
The industry is estimated at 15,700 employees and $1.7 billion in economic activity in 2011, with an expected 17% growth rate over the next two years.See it on page 4
02
Traditional console games still account for the largest share of industry resources, but that share is declining as social, mobile, casual and MMO games grow.See it on page 10
03
Quebec accounts for over half of the industry's jobs and operating budget, while Ontario hosts the most companies with 96 versus Quebec's 86.See it on page 11
04
Respondents rated government R&D support at 3.3 out of 5 on quality, while financial support and HR support fell behind.See it on page 5
05
Survey respondents identified changing industry dynamics as the top risk at 50.7%, with lack of talent second at 42.0%, yet education and training was cited as a top opportunity by over a quarter of respondents.See it on page 23
06
Canada's exchange-rate discount against the US dollar has vanished and has even mildly reversed, which the report says makes Canadian development more expensive for US publishers.See it on page 26
07
The report says that smaller Canadian publishers and developers face difficulty in securing financing, while banks are risk-averse and venture capital has largely refrained from investing in Canadian video game companies.See it on page 27

Summary

SECOR Consulting Inc. prepared this May 30, 2011 report for the Entertainment Software Association of Canada, based on an April 2011 survey of the Canadian video game industry and related industry data. The industry was estimated to comprise nearly 350 companies, directly employing approximately 16,000 people, with an estimated $1.7 billion in economic impact. The industry size estimate uses aggregated annual operating budgets and peripheral economic activity rather than retail sales or revenue. Quebec holds over half of the industry's jobs and aggregated operating budget, while Ontario has the most micro and small companies. The authors note that traditional console share of resources has been declining while social, mobile, casual and MMO games grow. Survey respondents rated internet and communications infrastructure and qualified personnel as the most important business conditions, and identified changing industry dynamics and lack of talent as the top risks. Respondents' top opportunities were new technology and platforms, with education and training cited by more than a quarter of respondents. The report also discusses exchange rate volatility, financing challenges, and outsourcing as issues to monitor.