Canadian Heritage Committee on Oct. 25th, 2012

[Richard Iwaniuk]

That's just the way it has operated.

Are we getting broader mainstream penetration? Yes, we're starting to see more articles in The New York Times. We're starting to see more mainstream press reviews on our games. Again, it's creating that critical mass. We're starting to see more of that penetration.

[Martin Carrier]

As I've always said, I'll know that we have arrived....

I will know that our industry has finally attained a certain maturity and has reached a certain level of recognition when I can open the Saturday paper and look at the video game listings like I can look at the movie listings or the arts and entertainment listings. That would be real recognition.

We have a lot of work to do and a lot of recognition to achieve. There was a celebration of video games in Vancouver last year in the form of the Canadian Videogame Awards. We are going to continue to support that in order to better showcase our industry.

[Luc Duchaine]

A key factor is that the next generation of people who will be writing and making television will have grown up with video games. So it will become second nature more and more.

I mean no disrespect to the people who are making television now, but they have not grown up with games. Their children have, but they still look at the industry as what I call “an anomaly”. Once a year, it is kind of cute to do a report on video games. It is on their checklist of things to report on, like the first snowfall.

The Montreal International Game Summit is coming up in a month. You will hear about games for a couple of days, but it will be all over by November 15. Everyone will move on.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you, Mr. Duchaine.

I am going to yield the floor to my colleague Paul Calandra. I should also add—and I have just agreed on this with Mr. Calandra—that, if people have other questions, they should speak up. Basically, when we run out of questions, the meeting will end.

Go ahead, Mr. Calandra.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Instead of asking a question, I'll just ask if you could do something. You talked earlier about the problems you are having with respect to bringing in appropriate people. As opposed to trying to get you to explain that further now, perhaps you could provide to the committee later some of the challenges you are having and some suggestions, and we could review that. I would appreciate it.

I have one last comment for Warner Brothers. I don't know if Scooby -Doo is new or not, but it's kind of like a soap opera now, and my daughters can't wait to see it, so thank you very much. It's spectacular. My youngest daughter is going out as Daphne this year.

[A voice]

A fantastic choice, if I may say so.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you very much.

Mr. Cash has a question.

[Andrew Cash, NDP, Davenport, ON]

Thanks.

We got a very good overview, and we'd like to thank you for that. I'd like to touch on how measures like the research and development cuts that were in the last budget affect an industry like yours.

[Richard Iwaniuk]

From BioWare's perspective, especially in the early years we were very fortunate to be able to rely on a lot of the government programs: first jobs in science and technology, IRAP, western economic diversification, and certainly the SR and ED tax credit programs. They were really important in helping us to grow as a studio without actually having to take external investment.

From our perspective now, we're a fairly stable, fairly large studio and part of a 9,000 person organization. The programs are very important still to continue to drive innovation within our organization. It's the smaller development teams that really need the continued support. I would expect that it probably has affected them more than us directly.

[Martin Carrier]

If I could just add to that, it is a very fast-growing industry. Of course, we have the artistic side, but the technological side and the online aspect is very important, so R and D is to us something that is obviously ongoing and that's how we keep a competitive edge.

[Andrew Cash, NDP, Davenport, ON]

In fact, there were cuts to R and D in the budget. When you're talking about the fact that if you're a smaller company, this is something that you relied on and needed, and we're talking about growing this industry, is this the right direction for the government?

[Luc Duchaine]

For us, even if we're a big studio, it's still important. R and D is critical. We're the flagship studio for the company. We're the biggest one. We do a lot of R and D. Having less money to do R and D can hinder our ability to invest and remain on top of the hill and remain in the top players in the world. It is important.

We are still growing. It's true for us. It's true for our Toronto studio. It's at 300 people now and they plan to go to 800 in a couple of years. A lot of people will be going in there. For us, it's the same thing. We're still planning to grow. We're not stopping our expansion in Montreal. R and D is critical. One of the points I touched upon in my opening statement was to keep that SR and ED in order to allow us to invest. We are at a critical moment in the business where certain papers will say that it is declining. Certain sales are, but right now with tablets, mobile smart phones, with Facebook, the population who have access to gaming has never been so big. We're talking about 1.8 billion people around the world who have access to games right now, whereas for consoles it's about 200 million. It is really booming and we need to be able to adapt. It's an industry that's moving extremely fast, so R and D is critical for us.

[Andrew Cash, NDP, Davenport, ON]

Yes, and given the fact that it is an export-based business, you're selling all over the world. Can you speak a little about the high Canadian dollar and its impact on the sector?

[Luc Duchaine]

I won't comment, because I don't know if there is an impact. For us, it's the labour, since we don't sell physical products. We sell digital, and it's manufactured all over the world, so I don't know what kind of impact it can have on our costs.

[Martin Carrier]

It has a development impact. Our labour costs go up compared to our original business plans, but in a way, we still have a competitive environment in Montreal and that is driven a lot by the talent. Of course, if it goes up, then our costs go up as far as our home office is concerned.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you, Mr. Carrier.

Thank you, Mr. Cash.

The chair now recognizes Ms. Wai Young.

[Wai Young, Conservative, Vancouver South, BC]

Thank you for coming, gentlemen. As I said earlier, my son is an avid gamer, and so I do know a little, not very much, about the sector.

I'd like to ask some broad questions. Maybe I missed them earlier and I apologize if that's the case. Then I want to ask some specific questions about your vision for this industry five years out, 10 years out, etc., because as you say, it's a very fast-moving sector.

First of all, how many companies and jobs in the sector do you think there are across Canada?

[Luc Duchaine]

There are about 16,000 jobs.

[Richard Iwaniuk]

There are about 16,000 jobs. That's the latest number.

[Wai Young, Conservative, Vancouver South, BC]

Roughly how many companies are there?

[Richard Iwaniuk]

There are 360 companies.

[Luc Duchaine]

Oh boy, I don't remember.

[Richard Iwaniuk]

Yes, I think it's 350, somewhere in that range.

[Wai Young, Conservative, Vancouver South, BC]

That's excellent. It's obviously a booming sector.

You mentioned earlier that bringing in skilled expertise and labour is a big issue for you. Is that across the board, for everything in terms of the different talent areas that you identified, such as the writing, the creativity and the programming?

[Richard Iwaniuk]

Yes, we deal with a significant velocity of change in our industry and that's changing even faster. Ten years ago when we were hiring, we'd put out an ad. We'd say we needed a programmer or an artist. Now when we put out an ad, we say we need an artist who understands this tool, this pipeline, this engine technology. Our need has become a lot more targeted. I think from our perspective that's part of it. It's very hard to find the senior people who can do those specific functions.