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"We are looking for companies that can match our pace and award-winning game innovations to create an even greater competitive advantage in this ever expanding industry. bitHeads can provide us with that edge"
– Mike Starzynski,
CTO, CryptoLogic
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News
Clippings
By http://www.ottawabusinessjournal.com/290186964787445.php
October 31, 2007
By all indications, Canada's video game industry is humming along with few signs of a slow down, and Ottawa's gaming firms are going along for the ride.
While Montreal, Vancouver and Toronto continue to attract the biggest game development studios in the sector, Ottawa is coming into its own.
"BitHeads has gotten into this industry in the last three years," said vice-president and COO Paul Winterhalder.
The local software developer jumped into the fray with its HeadGames division in 2004, primarily by developing and supporting games for the Internet, a growing industry as more and more games go online.
"Online gaming is a lot more complicated (than console games)," he said. "You have to support thousands of users in real time. (Gamers) don't want lag time – it feels like cheating and it's unfair.
"(But) Ottawa is a telecom town. If there's anything we know, it's building the real time scalable event-driven systems. Gaming has actually moved closer to the sweet spot of Ottawa. That's where our past experience is – the gaming market has moved a lot closer to that, so we've taken the half step closer to meet it."
It joins Fuel Industries, Magmic Games, Distil Interactive, Artech Studios and others who, together with competitors in Canada and the world, are taking advantage of an industry that hasn't yet reached market saturation by any means, the sector believes.
The local industry's growth is even surprising itself: Ottawa game developers held an informal forum last month under the auspices of the International Game Developers Association. Expecting about 20 participants, event-goers like Mr. Winterhalder were surprised when more than 50 came.
The event preceded the first-ever thorough study of the sector, launched in town recently by the Entertainment Software Association of Canada (ESAC), attended by federal Finance Minister Jim Flaherty.
ESAC released a report on the sector which showed that Canada's relatively nascent gaming industry employs 9,000 workers nationally at some 260 firms.
While game console manufacturers are mainly in the U.S. and Japan, a highly-developed network of outsourced game developers in Canada supplies titles to broaden the video libraries of the console makers.
"For the first time, we have a real picture of our nation's entertainment software industry, including employment figures and economic data," said Danielle LaBossiere Parr, executive director of the ESAC. "Most Canadians may not be aware that we are home to two of the largest game development studios in the industry (France's Ubisoft and California's Electronic Arts, with operations in Montreal and Vancouver), and that Canada is developing and exporting some of the top video games in the world."
Canada, the association said, has asserted itself well in this vein, and is among the "top-tier" of game-developing countries, with some 20 per cent of the world's top selling games being developed here.
OCRI chief Jeffrey Dale said that he's seen the number of companies involved grow locally.
"You need Java programmers (J2EE) for the gaming industry," he said. "And that's typically where we have great strength, with a lot of those here in Ottawa. We're not Montreal, but it is an industry that's here, and it's here enough that we know there's a group of them."
In fact, this May, Algonquin College is preparing to graduate the first 20 students in its game development program. About 170 students are currently enrolled in the new program, said its co-ordinator Tony Davidson, but he anticipated that they will get hired in both Ottawa and outside the city.
"The growth of this industry indicates we will have very strong employment opportunities for our students," he told the OBJ.
Ms. LaBossiere Parr said Canada's strength is in the creativity of its citizens – pointing out Canadians success in pop music and Hollywood – as well as its education system.
"We are producing some of the most sought-after grads in the world, both technically and artistically," she said. "We have some of the top schools in engineering and computer science as well as video game-specific programs. In my mind, that is the single biggest reason (why Canada excels)."
Annual revenues for the Canadian gaming industry were in the range of $1.5 billion to $2 billion in 2005, the association estimated, split between two segments: game developers, accounting for some 63 per cent of companies, and gameware firms, who design tools and software for game developers, accounting for 24 per cent.
The remaining 13 per cent is made up of consultants and in-game advertisers, such as Ottawa-born AdScape Media Inc., which moved to San Francisco before being bought by Google this year.
The industry is set for an explosion, the reports authors said, noting several sources for their predictions.
"Forty three per cent of firms expect greater than 10 per cent growth over the year, and almost all firms expect to hire more employees," the report read.
PriceWaterhouseCoopers, in 2006, estimated that the gaming market internationally will increase by 11.4 per cent a year until 2010 to US$46.5 billion. This year in Canada alone, gaming revenues are expected to increase 21 per cent, PwC noted, outpacing the U.S. (16 per cent), Asia (19 per cent) and matching Europe.
The study found that 43 per cent of Canadian households have some sort of a game console or handheld gaming device. While high, that leaves more than half of Canadian households without one – future growth potential.
"People were telling us that maybe the market was saturated three or four years ago, yet we continue to see double-digit growth every year," said Ms. LaBossiere Parr, adding that non-traditional markets keep opening up to the industry, such as women and gamers over the age of 50.
"I just think it's a really exciting time in the industry. Canada has huge potential to be a world leader. It's the fastest growing industry in the world, and we're really hitting above our weight class."
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