Rough Play in Vancouver Video Games


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Image by: Clinton Hussey (top) / Phillip Chin (pp. 2-3)

Can Vancouver’s billion-dollar video game sector survive the tectonic shifts reshaping the industry?

IT LOOKS LIKE PURE FUN AND GAMES at the sprawling half-million-square-foot Burnaby campus of video game giant Electronic Arts Inc. (EA). It’s noon and the cafeteria clatters with the sound of software engineers digging into bento boxes while fellow employees bash at arcade games in the “Executive Lounge.” Outside, a soccer game – real, not virtual – is in full swing on the all-weather turf, while other workers make use of nearby amenities including a weight room, yoga studio and basketball court. Meanwhile, a gang of awestruck visitors stock up on games and EA-emblazoned souvenirs at a store near reception – laughing and snapping tourist pics of each other to capture memories of the place where their favourite titles are made. There’s an energy in the air that seems part university campus and part amusement park.

Despite appearances, however, this is serious business. Even as industry sales seemingly defy the recession – with 2008’s US$11 billion in worldwide video game sales surpassing 2007’s figures by 26 per cent – trouble can be seen in these halls and in those of other B.C. game developers. Desks in Burnaby are being cleared to make room for workers from EA’s shuttered downtown Vancouver studio, Black Box, as the company consolidates facilities in an effort to cut costs. EA is bleeding cash quarter after quarter, losing US$641 million in 2008’s fourth quarter alone. The California-based firm announced in December 2008 that it was slashing its worldwide workforce by 10 per cent, or about 1,100 workers; about 300 of those jobs are coming out of B.C., leaving the local offices with 1,600 employees.

EA is the bedrock of Vancouver’s video game cluster, which, according to UBC economic geographer Trevor Barnes, includes some 140 companies employing about 3,500 people. Many of the other studios in town – none of which employs more than 200 – are startups founded and staffed by people who first cut their teeth at EA, outfits that weren’t even in business five years ago. And many of them are not faring particularly well either, including Radical Entertainment Inc., once the second-biggest video game employer in town, which sacked about half of its 230 workers last August. Other studios are cutting staff too. “We have an industry where 800 people were put out of work in the last six months,” says Jared Shaw, who runs Vancouver-based video game recruitment firm 31337 Recruiters. “When software developers stop getting snapped up, you know things are really bad.”

Changing consumer demands, the global economic meltdown and competition among international video game makers is re-sorting the industry’s winners and losers. The cost of developing games is soaring and companies are losing their stomach for risk – cutting back on the number of projects they’re developing, which means less work all around. In addition, there are a growing number of jurisdictions around the world pushing to compete with Vancouver’s video game cluster, offering various incentives to lure both companies and prospective employees. For the local industry, estimated to contribute almost two per cent annually to B.C.’s GDP, the challenges are mounting.

NOWHERE ARE THE INDUSTRY'S seismic shifts more keenly felt than in the increasingly precarious world of development. Within the business, there are essentially three players: console makers, such as Sony Corp., Microsoft Corp. and Nintendo Co. Ltd.; third-party publishers, such as EA, Activision Blizzard Inc. and Ubisoft Inc.; and the usually much smaller developers, such as Radical and Blue Castle Games. Console makers make the machines that run the games, although Nintendo also develops and publishes a fair amount of its own software. Publishers market and distribute the games and typically own the intellectual property behind them, while development studios – employing anywhere from 150 to just a couple dozen people and working on one or two games at a time – actually make the games, creating all the storylines, artwork and programming.

In recent years, local studios Relic Entertainment, Action Pants Inc. and Radical Entertainment have been bought out by publishers (THQ Inc., Ubisoft and Activision respectively), making them much more dependent on the fortunes and whims of their partner or parent. Publisher-owned studios gain access to their parents’ deeper pockets but lose a degree of control; the 120 jobs lost at Radical last year came after Activision shelved two out of the four projects it was working on. Independents, on the other hand, can make games for more than one publisher as a hedge against collapse. Vancouver-based Blue Castle, for example, recently more than doubled its staff, from 70 to 165, thanks to its deal to make Dead Rising 2 for Japanese publisher Capcom Entertainment Inc., even as the studio makes a sequel to The Bigs for 2K Sports.


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