Thank you, Mr. Chair.
I represent the Entertainment Software Association of Canada, which is the trade association for companies that publish and distribute video games in Canada. We represent companies like Ubisoft, Electronic Arts, Nintendo, Sony, and others. I know Ubisoft had been originally invited to attend today and very much wanted to, but were unable to at the last minute, so they have asked me to represent them and our other members.
Thank you very much for inviting me to speak to you today about the urgent need for Canada to increase its protection and enforcement of intellectual property rights.
To begin, I want to briefly outline the important contribution that the video game industry makes to Canada's economy because I think traditionally people just assume it's what their kids and their staff are doing when they should actually be doing work. But in fact the video game industry is a very important one for Canada. It's one of the fastest growing market segments in the global economy.
Our market is projected to grow at 16.5% annually, with worldwide consumer spending on video games soaring to $55 billion by 2009. Over the next few years this rapidly expanding segment of the entertainment market is predicted to overtake recorded music as the second most popular form of entertainment in the world, and Canada is establishing itself as a leader in the international video game industry. In fact, according to a study by New Media BC, there are over 300 companies from coast to coast. There are over 20 video game development studios and over 140 new and support services companies in B.C. alone.
In 2005, more than 40 of the top 200 games in North America were made or worked on in Canada. We're proud to tell you that two of the largest entertainment software development studios in the world are located here in Canada. Electronic Arts has studios in B.C. and Ubisoft has studios in Quebec.
Ubisoft employs over 1,600 creators in Canada, with plans to employ 3,000 by 2013. The average Ubisoft employee is 30 years old. Since 1997, Ubisoft has developed over 40 games in Quebec, including Tom Clancy's Splinter Cell, with 14 million units sold, Myst, with 11 million units old and Prince of Persia.
Ubisoft forecasts that its projected annual revenues for 2007-08 will be 750 million Euro.
Electronic Arts employs nearly 2,300 employees in Canada, almost half of their worldwide employee base. Over 1,800 of these employees are located in B.C., and 11 of EA's top franchises are developing in Canada, including FIFA Soccer, Need for Speed, NBA Live, and SSX. EA also works with over 500 vendors in Canada.
THQ has 186 employees in Canada; Activision employs 65 people in Quebec; Microsoft Canada has a team of 40 who are involved in sales, marketing, field merchandising, and the public relations aspect of their video game business; Nintendo of Canada, with 62 staff, provides similar sales and marketing functions from its head office in Vancouver; and Disney Interactive Propaganda Games Studio employs 140 employees today and 25 staff on contract, and plans to expand to 230 employees and additional contract staff by December 2008. Edmonton's BioWare Corporation was named one of the Deloitte Technology Fast 50, with a five-year growth of more than 650%. And there are numerous studios across the country that are really world-class, top-selling video game developers.
The entertainment software industry has created thousands of highly skilled, high-paying jobs in Canada. A study that was done for our association indicated that entertainment software workers earn twice as much as the average college graduate. In fact, the average starting salary for a video game developer is $67,000.
Canada is increasingly becoming an important market for the sale of entertainment software and hardware, generating a record-breaking $933 million in sales last year.
The video game industry is especially valuable to the Quebec economy, something which governments at both the provincial and federal levels have recognized through their own investment. For example, the Quebec tax credit for multimedia titles can be as high as 37.5% of labour costs.
Under a 2005 deal with the Université du Québec, Ubisoft will invest up to $16 million in the development of various educational programs to train the next generation of Canadian video game developers.
I've taken so much time to talk about these things because I want to underline for the committee the importance of intellectual property to Canada's prosperity and to innovation and competitiveness, particularly in this digital age.
Piracy in Canada negatively affects Canadian jobs and Canadian tax revenue. Why would we condone illegal business activities that reduce job opportunities for Canadians and cost the country substantially in lost taxes and wasted investment dollars? By failing to enforce the intellectual property rights of companies in Canada, we're allowing pirates and organized crime syndicates to unfairly compete against our own national interests.
To develop and market a bestselling video game title requires a massive investment by companies. Development costs range from $10 million to $30 million, and it takes a team of 100 to 200 people at least a year to complete. In developing and publishing a new game, our members take a considerable risk that they will be able to sell enough games to recoup their investment--