Thank you, Peter. Good afternoon everyone.
Interactive Ontario is a not-for-profit trade association. It was founded about 12 years ago. Our mandate is to assist our members in growing their businesses. Those are businesses in what we call the interactive digital media or IDM sector. IDM is one of the six cultural sectors supported by Ontario Media Development Corporation. We represent approximately 300 interactive digital media companies. These companies create interactive content across a range of sectors and for a wide variety of digital media devices or platforms.
Our members create video games but they also create e-learning applications, web-based content, apps and other types of content for mobile devices, transmedia properties for broadcasters or other rights holders, interactive advertising campaigns, and social media content.
Given our mandate and membership, it will not surprise you that we take a broad view of what the entertainment software industry means. As a couple of people have already alluded to, the idea of what a video game is has changed pretty dramatically over the past five years. You have already heard from witnesses who represent the triple-A game studios that create games for consoles such as Xbox 360 or PlayStation3 or for PCs. This is the traditional idea of a video game.
As you've heard, the industry in Ontario is quite different from that in Montreal. Ontario is home to many smaller developers who are bootstrapping their small businesses. They're financing their own projects and distributing their content through new digital marketplaces such as the App Store.
People also consume gaming content in new ways. You've heard a little bit about that. People, including people in this room, will pull out their smart phone while they wait for a bus and play a game really quickly or take a break at work and play a game on Facebook.
Games also serve a purpose broader than simply entertaining: they can also inform or educate. This is no different from other cultural products like film or television. According to somewhat dated data, Ontario's interactive digital media industry employs approximately 16,000 full-time employees. Approximately two-thirds of these companies employ 10 or fewer employees, so it is much more skewed to smaller companies. Ontario's digital gaming companies are heavily export oriented, with about half of the firms reporting that foreign sales reflect 90% to 100% of their revenues.
Ontario has had great success. As Peter said, this is a great Canadian success story. We believe this is due to four factors:
First, unlike the manufacturing or natural resource sectors, the barriers to creating an IDM company are much lower and this encourages entrepreneurship and the creation of small businesses. The main input in creating great content is great talent. Ontario benefits from a large number of universities and colleges that provide skilled labour to create these games. This includes technical skills, such as computer science, as well as artistic or creative skills through programs like Sheridan's world-leading animation program, or Centennial College's game design program, and many others.
Second, there is a concentration of other creative industries in Ontario. There's been a long history of excellence in creative industries such as music, broadcasting, publishing, film and TV production, and so on. This provides talent and cross-media opportunities that have fostered the development of a strong digital media sector.
Third, the Ontario government has made digital media, along with the broader ICT sector, one of its economic priorities, investing through tax credits and other means of support.
Fourth, both the federal and provincial governments have provided support targeted at domestic, Canadian companies as well as foreign-owned digital media companies. Not necessarily to the same extent or in the same way, but the government has recognized that to build strong Canadian companies, we need an ecosystem that has both smaller and large companies. You heard about that from some of your other witnesses as well.
Government's role in fostering a successful digital media industry is critical and it cannot be overstated. That said, we believe the objective must be to build a successful creative industry. The emphasis is on the last word: industry. It's not to subsidize cultural products as has been the assignment for other cultural industries. In other words, unlike is often the case in film or television, the goal must be to make money and for the government to see its investments recouped through employment, taxes, or even straight ROI.