[GDN] This might sound rude but how is this not to be looked at as a huge payoff for Ubisoft to bring its studio to the Ontario province? I mean, it’s 33% of Ubisoft’s projected investment in the project.
[GP] The attraction of Ubisoft, or any other major publisher for that matter, 
must be viewed within the context of a broader strategy aimed at enhancing and strengthening the digital media cluster in the Ontario Technology Corridor. The Ubisoft investment raises awareness in the mind of the industry that Ontario is the place to do business. This will contribute to the growth of the Ontario economy with the addition of high value-added and knowledge intensive jobs.
[GDN] Have other companies received funds proportionate to this amount given to Ubisoft?
[GP] Other companies both in the digital media and other industry sectors have benefited
from public sector funding. In fact government programs have assisted companies to move up the value chain.
[Note, there was no mention of proportionality.]
[GDN] Where did the funding for this come from? Is it coming out of taxpayer pockets directly or is there some other source?
[GP] This is a question that is best directed to someone in the Provincial government, but my unofficial perspective suggests that over the years the provincial government has, through the strategic application of tax dollars, contributed towards economic development by helping to stimulate investment in key/strategic industry sectors.
[GDN] Do you believe the tax payers will see $263M as a valid investment in a project that will create only 800 jobs? That’s exactly $328,750 per job. You could certainly just employ far more people with that money couldn’t you?
[GP] The cost per job breakdown should be assessed over a 10 year period and the ROI discussion ought to consider the direct and indirect employment spinoffs that will occur at the local as well as provincial/regional level within the industry and economy. It’s not a matter of creating employment but creating high value-added knowledge intensive jobs that will contribute to the overall growth of the province.
Closing Note:
[GP] The Ubisoft investment was not a relocation but an expansion, the new Ontario-based studio will be producing its own triple A games. I hope these responses help you to better understand the Ubisoft investment and what it means to the Ontario Technology Corridor.
[GDN] Without seeing the numbers in regards to other firms expanding operations into the area it’s hard to say if the $263M promised to Ubisoft was extraordinary or not. However, we do have some basic numbers on other investments they’ve made:
- $10 million investment to help the University of Waterloo create a new campus and research and innovation centre focused on global business and digital media
- $9 million investment at the Ontario College of Art & Design to help create new digital media research and training programs.
Why would a company expand to Ontario?
- Ontario Interactive Digital Media Tax Credit – refunds 20 per cent of production costs
- Ontario Computer Animation and Special Effects Tax Credit – 20 per cent of labour costs
- OMDC Interactive Digital Media Fund – up to $150,000 in project production funding.
- The Ontario Ministry of Economic Development and Trade offers incentives to grow business with its Next Generation of Jobs fund – 15 per cent of total project investment.
Now if you were going to create a $1M game wouldn’t you want to recoup 20% of your production and labor costs? That’s a large chunk of change, unless you’re EA and put 75% into marketing games like Dante’s Inferno.
Seriously, in my opinion it’s a very large investment in a company that already had three Canadian Studios (Montreal, Quebec City and Vancouver). For Ubisoft, I’m sure it was a no-brainer 33% upfront and 20% back in production costs? That makes shareholders drool at the prospect I bet.
I’m still considering expanding GDN to Toronto aside from our US and European offices. If there’s going to be a massive pile of game development going on there, I think we should be involved in covering it.
NOTE: In 2009 Ontario proposed that the tax credits be 35-40% http://www.omdc.on.ca/Page3400.aspx the 20% mentioned was in effect earlier in the program which is now at 25-30% according to the website.
