Video game developer tax credits doing more harm than good? (7)
Mark Greenshields has written a brief criticism of the government tax credits used by Quebec (and recently Ontario) to attract developers and foster industry growth. I found it to be an extremely interesting and surprising article, as I had previously never read anything but praise and support for the tax credits offered to companies in Montreal and the rest of the province. His points are honest and hard to argue with, given what I know of the companies that exist in Montreal and the types of games being produced. This is the kind of candor you just won’t find from the CEOs of Ubisoft or EA or Eidos:
“Montreal is not an efficient place to run a video games development business. Personal taxes are high, and a good number of the available staff do not have the required attitude. There are some commercially successful games coming from Montreal studios, but can you show me one that did not cost many millions and require a huge team? Unless you have big pockets you’ll need to spend a lot of money developing your games using bigger teams than are necessary, a situation created partly by the tax credit system and partly by the speed of growth in Montreal.”
Read the full article at Develop: Tax Breaks - Panacea or Pestilence?
Greenshields is one of the founders of Glasgow-based DC Studios. He operated an office in Montreal for several years before closing up shop and deciding to focus solely on racing games with his new company, Firebrand Games. Still based out of Glasgow, Firebrand’s North American office is now located in Florida.
The comments in a related article on Develop reveal quite a bit on where Mark Greenshields is coming from in his criticism of Montreal’s gaming industry: http://www.developmag.com/news/29488/Montreal-is-not-an-efficient-place-to-run-a-business
Candor? Yes, but improper management can also severely harm your business’ efficiency!
Hey michel,
I believe Greenshields’s article was more about not being able to find proper talent in Montréal. I don’t think he was criticizing directly tax credits.
But tax credits are directly responsible for bringing in huge companies like Eidos who in turn suck up talent and make it harder for smaller studios to get started.
Ok, maybe Greenshields is a terrible CEO and DC Studios failed because of mismanagement, not poor office location, but then where are the other small independent developers? Compare Montreal to Vancouver or Austin and you’ll notice we’re heavily slanted towards giant multinational publishers. There’s the odd studio that does edutainment or cellphone games or fills some other niche, but outside of Ubisoft, EA, Eidos, A2M there is basically nobody. If Greenshields is full of it then why aren’t there any smaller studios here? I just look at Vancouver and see smallish studios like Relic and Rockstar beside a giant like Nintendo and wonder why this doesn’t exist in Montreal. I guess it does all come down to a lack of local talent. Another way to look at it might be that the tax breaks are useless for small companies until there’s a big enough talent pool for all these new jobs. I’m not sure if or when that will ever happen though. Ubisoft Campus doesn’t seem to be doing a good enough job on its own, if Lost is any indication (I’m generous in suggesting that was made by Ubisoft Campus graduates. It seemed more like a final year project made without the oversight of actual experienced Ubisoft employees).
Michel,
I am not an expert as you are about the business of video games in Montreal, I would say though that the fiscal system in Québec benefit big companies.
Also I think there is a culture in Quebec towards the cult of big companies.
I hope we will see small, independent video game makers at the upcoming gamecamp at the SAT. Those kind of events should be encouraged more.
I find it very interesting to look at the comments section relating to the article in develop magazine.
Something tells me there is more to this story than blaming it on tax credits…
Michel, when you ask “where are the other small independent developers?” you seem to assume that there are not in Montreal, so let me tell you, I am in Montreal, I am a video game developer and I can tell you that there are small independent developers in Montreal. Regarding your guess about the lack of local talent, I can guess you dont have the skills to measure it.
The growth of a firm depends not only on the developer talent but also on other forces required to maintain the firm alive …
There is nothing but positives to be said about the multimedia tax credit system for promoting high tech growth and employment.
The problems start when these are used to subsidize, in Greenshields case,his offshore errors such as Fear Factor and State of Emergency in Scotland. His personal business errors. High taxes is a non starter unless you are being taxed for income you have not declared-the comment came from Greenshields.
He is out of Canada and has made room for better business leaders.
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