Thank you very much, Chair.
Thank you very much for having me here today. I'm excited that you're looking thoroughly into the video game industry. It's a very important industry in Canada.
We are the third-largest video game development country in the world, and if you look at that by population, we're number one. It is something we have been doing for a long time, which we do very well.
It's a wonderful, exciting industry to work in, I will share with you, because it's an industry of so much change, and it's an industry that is diverse across our country. The experience of developers in Vancouver, for example, is quite different from the experience of developers in Montreal and Toronto, two other very strong hubs in the country.
I started in the video game industry in 2005. I came out of health care, believe it or not. I was working at the Canadian Cancer Society and was looking for an entrepreneurial experience and decided to jump into video games. It seems a bit of a stretch. It was, but it was an interesting decision. At that time we were able to build up a small studio called Deep Fried Entertainment into a 45-person studio.
Things were very hot in the sector from 2005 to 2008 at the time that I had that studio, and we did extremely well. The business model at the time was really one of doing work-for-hire projects. The value in video games, I would argue, is largely in the intellectual property, in the creation of characters and story and an identifiable adventure world. If you think about intellectual property, think Star Wars or Assassin's Creed or something in which there are very “relatable” characters that people fall in love with and want to be a part of.
During the 2005-2008 timeframe, most of the intellectual property was held elsewhere, and Canadian companies were doing work for hire. There were still wonderful, high-paying jobs, with lots of opportunity for growth in the sector at the time, but we weren't necessarily owning the value, a situation I have witnessed change since I have had my second studio.
Things shifted about 2008, and those lucrative contracts coming out of California somewhat dried up. We still have a lot of very strong studios in Canada working in the console area, largely concentrated in Montreal. The change in Vancouver was interesting, because our tax credits were somewhat lower than those we saw out east. What happened, in my opinion, as a result was largely that we shifted from being an area focused on work for hire and working with large foreign corporations to one in which a very strong entrepreneurial spirit has developed, and you see a springing up of many small companies doing independent projects.
I personally find this very exciting, because we get to own those intellectual properties. The potential for these small studios to grow into large companies has never been higher, in my opinion. It is a wonderful time to invest in this part of our economy. There is tremendous opportunity for the future.
If I might add one other small note from a personal perspective, for a very long time video games have been the realm of young men, and that has changed and is changing. Video games are for everyone. Video games are used in very many contexts that are different from those we've seen in the past. We can use video games in education and in health. Video games are being used by grandparents to connect with their grandchildren, and we call them leap-frog gamers: they go straight to their iPads and are doing it so they can connect with younger generations.
Please, when you think about video games, don't necessarily think about that stereotypical person in the basement playing, because things have really changed and continue to change by leaps and bounds.
Thank you very much for your attention.