Alberta video game developers say industry is being left behind in province

A lack of incentives for Alberta video game development is taking jobs and economic opportunities elsewhere, industry advocates warn.

Last week's provincial budget promised increased funding for film, television and innovation programs but was a disappointment for the video game industry as it failed to offer any new support.

"It's just an absolutely massive opportunity for Alberta, but we continue to lag behind other provinces," said Scott Nye, chair of the industry association Digital Alberta.

A report from the Entertainment Software Association of Canada notes the industry contributed $5.5 billion to Canada's GDP in 2021 — a growth of 35 per cent over two years. 

Full-time employment in the industry rose by 17 per cent in that time while studios continue to pop up across the country, primarily in Ontario, Quebec and British Columbia where tax incentives are offered.

Alberta had its own Interactive Digital Media Tax Credit, introduced by the NDP government. It covered 25 per cent of salaries and bonuses for staff, along with an additional five per cent for employees from diverse or under-represented backgrounds.

After being elected in 2019, the UCP government yanked the credit and introduced its own tax regimens for film, television and innovation.

The growth of the interactive digital media sector in Alberta has significantly slowed, Nye said.

"A lot of companies that are members of Digital Alberta are making the hard decision to, unfortunately, stop growing in Alberta, and instead put their investment in jobs in other provinces."

Fostering growth

Trent Oster, CEO of Edmonton-based Beamdog, said his initial growth plan had the video game development company at 130 employees at this point. He's now sitting around 80, with almost a third of those in other provinces.

"It's a race and we were actually accelerating — we were on a catch up pace — and then that got knocked out from under us," he said. 

Oster pointed to Quebec as an exemplar province that aggressively courted video game developers. Montreal boasts offices for major studios like Ubisoft, Warner Bros. Games and Electronic Arts.

Such an ecosystem allows employees to gain experience and move between companies or start their own. Alberta's industry is missing a tier of experienced employees and must look elsewhere, Oster said.

Alberta needs to foster a similar ecosystem to remain competitive but video game studios are like start-ups and scale-ups that need support before they can become major profitable ventures, he said.

"If there's no support and no investment and, as a result, no infrastructure that builds up around it … the companies just either starve out or they move."

Tech sector support

A spokesperson for the Ministry of Jobs, Economy and Innovation said in a statement the province's tech sector has grown exponentially during the UCP government's tenure. The spokesperson pointed to investment success stories like those from Amazon Web Services and homegrown companies like Jobber. 

The statement did not address video game or interactive digital media development directly.

Kyle Kulyk runs independent studio Itzy Interactive, which counts three full-time employees and four contractors. He said the only reason he's not looking to set up shop elsewhere is that he's already built a life in Edmonton.

"I stay in the province simply because my family is here," Kulyk said.

Alberta's lower corporate tax rate doesn't mean much for a small business as it can take up to three years before the studio sees any income from a product being put out to market, he said.

Kulyk noted the TV production of HBO's The Last of Us, which filmed around the province last summer and was upheld as an investment success story, is based on a video game.

"They won't put any effort into growing the industry that creates those [intellectual properties]," he said. "And it's just a lack of vision."