Canadian Video Game Industry Faces 9% Decline Amid Post-Pandemic Adjustments

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Canadian Video Game Industry Faces 9% Decline Amid Post-Pandemic Adjustments

The number of video game companies operating in Canada fell by nine per cent following a pandemic-driven gaming boom, primarily affecting smaller independent studios with fewer than 25 employees, according to an industry report.

The Entertainment Software Association of Canada’s report states that 821 video game companies operated in 2023-24, marking a decrease of 78 from the peak in 2020-21.

Association president Paul Fogolin said a decline was anticipated after the surge in gameplay during COVID-19 lockdowns led studios to expand. He noted that while the number of gamers did not significantly increase during the pandemic, those who played did so more frequently.

“Coming off of that, we knew there was going to be a slight dip in engagement with games, and that was also at the same time as new macroeconomic conditions, inflationary pressures, lower consumer spending,” Fogolin said in an interview.

Past reports show 573 video game companies in 2017 and 692 in 2019. Despite recent declines, Fogolin emphasized that the industry “remains strong and stable.”

The report also revealed a 3.5 per cent drop in jobs since 2021, when there were 35,260 full-time positions, including programmers, writers, and artists. In 2023-24, there were 1,250 fewer full-time jobs, with most work concentrated in British Columbia, Ontario, and Quebec.

However, the ratio of full-time employment increased from 81 per cent to 86 per cent, indicating a shift toward long-term projects. Additionally, the average salary rose by 21 per cent to $102,000 per year.

Released on Jan. 28 and based on an online survey conducted between May and June 2024, the report attributes sector growth to a three per cent rise in economic impact, contributing $5.1 billion to Canada’s GDP.

A disparity between local and foreign-owned companies was also noted: while 76 per cent of surveyed firms were Canadian-owned, foreign companies employed 88 per cent of the workforce. Most closures and downsizing affected companies with fewer than 25 employees.

The global gaming industry has faced widespread layoffs, mirroring trends in the broader tech sector. In Canada, Edmonton-based BioWare laid off approximately 50 employees in August 2023 and an undisclosed number in January 2025, citing a need for a “more agile and more focused studio.” Montreal-based Behaviour Interactive cut 95 jobs in June 2024 due to “unprecedented competition.”

Meanwhile, major studios continue to drive the industry. Ubisoft developed most of the “Assassin’s Creed” titles in Quebec, while Electronic Arts produced “NHL 24” and “EA Sports FC 24” in Burnaby, B.C.

Homegrown indie successes also emerged, including the poker-themed game “Balatro,” developed by an anonymous Canadian, which has sold over five million copies since its February 2024 release.

Michael Iantorno, a PhD candidate at Concordia University specializing in video game history, industry labor, and intellectual property law, highlighted challenges for developers. “If you’re a small developer … you’re kind of fighting over scraps in terms of funding,” he said.

While funding sources like the Canada Media Fund and provincial organizations exist, demand outweighs availability. “We need to fund arts and small businesses more, especially in the games sector,” Iantorno added.

Remy Siu, the Vancouver-based developer of “1000xResist,” credited the Canada Media Fund with enabling the game’s production. His studio, Sunset Visitor, received nearly $490,000 in funding, allowing for creative risks.

Siu pointed to challenges like the weak Canadian dollar, which could hinder hiring U.S. talent. However, he noted that layoffs in major studios have resulted in a strong talent pool. “I actually don’t think there’s a talent acquisition issue,” he said. “We see a lot of really talented people looking for work right now in the game industry, which is unfortunate.”

Iantorno suggested that supporting new and smaller developers through alternative funding channels could help sustain the industry. One such initiative is Baby Ghosts, a Canadian games incubator that provides grants and education to emerging studios.

“If we can distribute funding in ways where we can get it to people who don’t typically receive game funding in areas where they don’t typically receive game funding, we can both foster the indie industry and tell stories from all across the country,” he said.

Fogolin remains optimistic, emphasizing Canada’s reputation in the gaming industry. “We are really, really good at making video games in Canada,” he said. “And I think a lot of people don’t know that.”

The study, conducted by Nordicity Group, collected data from 150 video game companies.

Source: Swifteradio.com

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