Grand theft tax break

Why do governments subsidize so much of the video game industry’s operations?

The New York Times has published an exhaustively reported piece exposing the cocktail of deductions, write-offs and tax credits that make the video game business one of America’s most heavily subsidized industries. This level of government cheese is usually reserved for enterprises presenting some kind of clear social benefit in terms of education, health, environmentalism or the like. Heavy subsidies like this can also be put in place to nurture fledgling industries.

Without engaging in the ever-annoying debate on whether video games are good or bad for us, I think we can all agree that they’re not as sympathetic a cause for hand-outs as, say, clean energy tech or funny costumes for puppies.

And the health of the industry is inarguable—sales of video games reached $15 billion in the U.S. alone last year, eclipsing the music industry, if that still means anything—and it would likely do just fine without the charity. So why the corporate welfare?

The reasons are many, but underpinning them all is the dodgy notion that video game jobs are somehow more valuable than other jobs, and that video game technology is somehow a crucial area that America should lead. I’m not sure how making BoneTown can be equated with the space race, but the magical thinking that has convinced American legislators they are in desperate need of unshaven game devs in funny Internet t-shirts has also mesmerized our own Canadian policy makers.

Name-checked in the Times piece are Canada’s video game industry subsidy schemes. Each province is elbowing the next in the neck in a hyper-competitive battle to lure foreign game-makers to their soil. The objective? Jobs for coders. Seduced by sexy talk of information workers and creative economies, provincial governments have collectively handed billions to game makers. Quebec, for example, contributes as much as 37 cents for every dollar on a coder’s paycheck.

I suspect that once the magical silicone dust settles, both governments will learn that coders are the grunts of gaming. Companies like Ubisoft and Electronic Arts will exploit our tax breaks for as long as it serves them. When developing workforces in, say, Bangalore train enough skilled code-monkeys to undercut local coders, the jobs will quickly migrate to India, leaving little of the creative economy behind.

Jesse Brown is the host of TVO.org’s Search Engine podcast. He is on Twitter @jessebrown




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Grand theft tax break

  1. Headline:  US government subsidizes junk fook, video games.

    Headline:  US has obesity epidemic.

    If this isn’t an argument that social engineering works, I don’t know what is.

    Seriously, though, it’s one of the last decent-paying industries left in North America.  There may be something to the argument that domestic companies still have a significant enough advantage in terms of cultural knowledge & product turn-around that the industry will actually stay domestic.

    In Canada, tax breaks usually have something to do with what the government wants to encourage.  The link isn’t usually so strong in the US.  It’s usually more linked to vote-buying & earmarking, and of course business lobbying.

  2. Who do you think is going to be flying our unmanned war-drones over China, 40 years from now? 

    • The Chinese. We’ll outsource it to a subsidiary of China Ocean Shipping Co. (COSCO) the merchant marine arm of the Chinese People’s Liberation Army. Much better rates.

  3. How about getting a clue and comparing the return the industry gives versus the tax credits? Also, you have to have made money before you can claim tax credits. Also, how about comparing to other industries like say, oil and gas? This is just another hit bait article. Boo Macleans, booo.

    • How’s about giving your head a shake.  The article asks a pretty straight forward question: why are the gaming companies receiving massive subsidies when they are already established and profitable?  Mr. Brown suggests it may be time to take the training wheels off.  The subsidies are not necessarily all tax credits, btw.

      • Because many firms are not that established yet in many of the jurisdictions they’ve moved to recently, and that profit can therefore pick up and move, taking the jobs and taxes with them.

        In a modern global economy that attitude is anathema to the development of new advanced economic hubs. They can go just about anywhere really in many respects, so a lot has to be done to attract them and get them to set up real roots.

        Quebec has done a good job in that respect and are benefitting greatly from their forward thinking attitude in this regard.

    • OK, what is the actual return to the tax base? The lack of information on this point speaks volumes.
      I own a corporation and no, you don’t have to have net income to claim tax credits. I claimed a loss last year and applied it to income I earned two years ago and got substantial money back.Good point on subsidies for oil and gas but that’s another hit bait (link bait) article.

      Are you a game player or a programmer? I’m seeing a lot of righteous indignation over an article that  does not attack games (just pokes a little fun). I like video games and I’m sure others commenting here do too, the game coders have a legitimate jobs producing consumer goods that are in demand,  and sales provide tax income.

      The problem is continuing tax subsidies to a mature industry earning huge profits.

      • do you have any idea how much money EA makes?  there are profits, I assure you. Also – while Film subsidies cover a third of Canadian’s salaries, no such parity exists for Games salaries.  If it were, however, I assure my income is taxed at a higher rate.  again, the subsidies are (way) more than recouped by the taxes generated.  That’s why they exist – to bring that tax revenue to Canada.

  4. Let’s subsidize the video game industry and shut down the libraries….

    • With respect, that’s a misnomer. The two are unrelated because what the government makes back in corporate and income taxes far outweighs the cost of the incentives, ie you have more money for the libraries this way. Let’s not confuse conservative mentality with reality.

      They choose not to fund libraries because they have an attitude problem arising from their strict ideological blind spots, not a financing problem per se.

      Until an industry is established and inter-linked within the community enough that tax incentives won’t easily lure them away, it’s just silly to think that of this as anything but an investment in our people and our economy.

      • Phil, it’s politicians being wooed and wowed and wined and dined at CES in Las Vegas by EA, Ubisoft, Propaganda, Rockstar, Bedlam, Slant Six and the rest being told how much games production will “help the children” or some other catch phrase by professional lobby firms while they pose for pictures with the super cute Japanese rep girls in the camo-pattern micro-mini dress outfits.

        Tax subsidies should be only for situations were standard financing can’t be done (not for profit, community services, some R & D) and can be legitimately shown to provide a net tax benefit within a reasonable time frame using standard accounting practices. 

        If you read the cited articles the tax rules being used make it possible to earn huge net amounts and declare very little income.
         
        This is just tax payer’s money making the rich richer.

        • While I don’t neccesarily disagree in general, what you’re looking at here is a situation of competition between regional economies.

          Simple fact is, if we don’t compete in some way, either through infrastructure advantages, labour advantages, tax advantages etc. then we simply won’t attract this type of business.

          Since these are relatively high paying jobs that generate spin off economic activity, the “loss” can be significant.

          As such it isn’t about “video game” producers per se, but any similar high tech industry.

        • “Help the children”?  Where do you get this stuff.  The politicians wine and dine the games companies to draw a lucrative industry to their base.

  5. Simple.  Wave the magic words “knowledge based economy” in front of politicians, many of whom have little or no insight into the role of “technology” in the greater economy (I’ll be blunt- we elect some truly dumb people, and lots of them) and they will fall over each other trying to get behind that action without even sitting down and doing the math as to how much those “tech jobs” actually end up costing their fellow taxpayers.  (Hint- find me ten politicians in Quebec that can deduce inside 5 seconds that those tech jobs being supported to the tune of 37% are actually a drain on the economy, and I’ll show you pics of Bigfoot.)

    • I bet it is pretty simple to get you foaming at the mouth.  

      “Pol-i-titian”

      Anything happening yet? 

      Try this one:

      “Qweebec”

      Anything?

      OK, last try:

      “Qweebec pol-i-titian”

      Oh, do go and clean up! 

    • I guess the politicians think that the knowledge gained shooting hookers in the face while playing GFA or skills gained playing BoneTown (wow! really?) is worth tax payer’s money.

      You’re a bit wrong in one part of your statement. Politicians do not pay as much in taxes as their fellow taxpayers. And in Canada it’s Sasquatch.

  6. This is a far more complicated issue than this article suggests. In fact the laissez faire attitude of this article is kind of pathetic really. Jobs for coders my royal behind.

    The video game industry is highly lucractive and the competition amongst juridictions to lure in developers is huge, but it’s not really about drawing individual firms or “coders” (eye roll), it’s about bringing in enough different types of related firms from across the video game spectrum and promoting linkages both between these various firms and within the local economy so that they lay down semi-permanent roots.

    If you have a workforce that is or becomes highly trained in this industry, then over time you create a natural hub that won’t require the same incentives. If done right it can be extremely lucrative for the economy and can be relatively long lasting.

    When you need a workforce and economic environment in which velocity, agility, logistics networks and engineering capabilities are key to top notch development and turn around, you don’t go to freaking Bangalore, you go to a first rate country in which you can find all these things together in one place.

    The incentives are just the opening volley in the highly competitive global economy. To not understand that shows a serious lack of awareness about the world as it stands TODAY.

    • Why attempt to be more competitive in a race that, ultimately, is undermining the overall competitive position of our society? In exchange for what? Semi-permanent roots?  (eye roll).  

      Why are we becoming uncompetitive?  Because the flower of our youth are wasting themselves on video games!! Pathetic. 

      PS: 
      Hubs are not naturally occurring phenomenon.  The catch phrase you are after is critical mass. 
      Not requiring the same incentives is still requiring incentives.
      Bangalore is a city, not a country, where, btw you can find lots of engineers because they don’t play video games. 
      A real economy is not about scraping the bottom of the barrel for the last scraps.

      Your comments show a serious lack of understanding of how the world got to be the way it is TODAY. 

      • Let’s see, you forward the age old and ridiculous notion that somehow THIS generation of the young is so much worse than their parents. Pffft. People has been saying this since Plato’s time. Wasn’t true then, isn’t true now. Get over yourself already.

        BTW, technology “hubs” is a pretty common term, but the fact that you felt it neccesary to argue buzz words points the vacuous nature of your response.

        Ditto for your geography lesson. No kidding Bangalore’s a city. Duh.

        That you think attracting highly lucrative technology-based industries with a fast development rate and the tendency to incorporate the latest in modern technology is “scraping the bottom of the barrel” is the final nail in the stupidity coffin.

        Maybe you should find something better to do with your time bud, because you clearly have nothing to add to this discussion.

        • You are in douche mode cause your precious little first person shooter games are threatened.  I get it.  Aw, poor little natural hub, don’t cry.

          Seriously, though, you aught visit most any school in urban areas today and take a good look at the kids that are there.  Then, come back and tell me I am wrong. 

          Open your lazy game addled eyes.  

          • ROTFLMAO

            It’s funny when people go off thinking they’ve pigeon-holed someone but do nothing more than pigeon-hole themselves.

            I’m not sure what kids find attractive about “first person shooter games” really, it’s probably a generational thing, but it can’t be any worse than the stuff I was into as a kid.

            BTW, thanks for the comic relief! LOL

          • Which is exactly my point.  I could not figure out why any adult with the pretense of sanity would be carrying water for the video game industry, so I concluded that you were probably a man-child that plays lots of video games.  My bad.  Your error, though, is the more grievous. 

            BTW, have you had a chance to make it out to any schools to look?  No? Seriously, do it.  I’ll be around.  Make sure you get back to me with your findings.  Extra seriously: get off your hub and really look, don’t rely on your memory. 

            … and you are welcome for the comic relief.  I am usually tongue in cheek. 

          • @ColdStanding:disqus 

            I’ve got two kids in school and I’m fairly involved in their activities and volunteer a lot as I think any concerned and engaged parent should be.

            Maybe it’s because it’s an elementary school, or maybe it’s the more affluent neighborhood I’m in, but I’m not seeing what you’re talking about.

            I seriously question the concept that video games are a symptom of all that’s bad in the world today as it relates to young people.

            I think that just passes the buck of responsibility and distracts the focus from where it belongs: on the parents and society.

            It’s not the technology that matters, it’s how we use it. As human beings, “games” are an age old method of learning, and video games (if properly employed) can be useful in many regards. My son has a “leapster” and in concert with the games I play with him, he has learned math concepts I didn’t until I was nearly twice his age.

            The simple fact is that most children will grow to be precisely what their parents and society push them to be, but that includes the silent messaging we often don’t take into account.

            Yes that can include video games if not properly focused, but that can be said of practically everything one can be involved in and is not unique.

            It is we the adults who have the power here.

    • Oh, for the love of outdoor sports – what related firms? America has enough Starbucks, Crispy Cremes, micro brew pubs, and ironically hip t-shirt stores.

      OK, being serious now. A gaming company does not utilize the resources of a region any more than any other industry. In fact it uses less local infrastructure and employs fewer local people than, say, a retailer or manufacturer of durable goods.

      The office furniture (made in China) is ordered from Office Depot HQ, the work stations and servers (made in China) from Dell, the software (programmed partially in Romania, Vietnam, India, and China) from Autodesk and Microsoft, the communications from a national provider (using hardware and cable made in China), the vector graphics rendering is sent to a render farm (using hardware made in China or even based in China), and the finished product is shipped through the internet or printed, burned/copied, and packaged entirely in China.

      The salaries of a couple of hundred or even a dozen programmers and support staff might make a difference in a small community. But, given the well documented tendency for these game firms to move great distances at the drop of a proverbial tax subsidy hat, the benefit is tentative at best.This also proves that game companies have almost no roots in the local community or local infrastructure. Even you use the term “semi-permanent roots”.

      Any industry model that functions on the basis of a tax subsidy after existing for decades is broken.

      • Like the film industry? 

        • I’ve worked in films and they employ a lot of locals and use a large amount of local resources. Trucks, house and set rentals, extras, catering, security, technicians, carpenters, grips, electricians, set decorators, property handlers…the list is huge.

          But, yes, good point, the tax subsidies the film industry gets and all of the corporate welfare that keeps going and going while the social services that the government is supposed to provide gets cut or eliminated more and more.

          The core of the article (as I see it) is questionable government subsidies not the gaming industry per se. Now excuse me, I have to play Angry Birds for three hours – again.

          • are you familiar with the concept of taxation?  It’s why profitable business are attractive to a government.  It’s called a “tax base”.

      • First of all, the things you’ve listed such as work stations, computers, servers etc etc are generally purchased through Canadian suppliers, so yes, it does contribute to the economy.

        Secondly, there’s the income taxes on these higher end salaries.

        Third, when you attract multiple firms you start to see the formation of linkages between these firms. These linkages include suppliers, subcontractors, or new firms spun off from the parent company. There are a many stages of development of any given product and contracting firms often specialize in certain areas and handle projects from multiple buyers. The larger the cluster, the more likely you are to draw more firms and the existing firms become more rooted in the region.

        Further more, the longer you have such a cluster in a region, the larger the talent pool becomes as local colleges start training more and more of them and become better at training them over time.

        Ontario for example is in a good position to do that, with its existing special effects, animation, film and technology industries supplying many of the skills and other ingredients for a successful video game industry.

        But for a new cluster to really take off however, you need a video game publisher to act as an anchor, and jurisdiction like Ontario and Quebec have had the foresight to lure in firms like Ubisoft, EA, Lucas Arts etc..

        It’s simply not true to suggest there aren’t spin offs and that it doesn’t benefit a regional economy considerably to compete for these firms.

        There’s a reason they’re competing after all, and it’s not just for PR reasons, but substantial economic ones as well.

        • It’s nice to read a argument rather than a dyspeptic rant. Too much of the forum content, anywhere, is acrid name calling.

          Yes, game companies can and do contribute to local economies. My argument is that the tax exemptions, credits, and outright bribes are not worth anywhere near the revenues returned. Also, in my experience with the gaming industry I have found that is a very insular domain; almost xenophobic in its behavior. They do not anchor technology hubs nor encourage any related industry that benefits local economies. It could even be said they are a drain, taking the best and brightest away from the important but unglamorous business, medical, and engineering IT careers with the lure of a high paid, sexy, exciting job (although I’m sure that the reality of 14 hour days 7 days a week making the experience of shooting an alien invader in the face just perfect for the player before the game release deadline soon takes the shine off, despite the really cool, limited edition, free t-shirts and cappuccino machine in the lunch room).

          The taxes on salaries are a very minor consideration. In the case of the Quebec subsidies of up to 37.5%, or even B.C. at 17.5%, it would be a net loss. It’s worse with the executive salaries. Using stock options, preferred share dividends, and other tax avoidance schemes I doubt they pay much tax at all. And try to justify the Ubisoft-Ontario deal with the province giving Ubisoft a $263 million grant to open a new studio in Toronto and create 800 jobs over a 10-year period. That’s $328,750 of tax money for each job.

          Your problem and mine is that we can argue all we want but neither of us can prove or justify our positions because the neither the governments nor the game companies will provide any documentation proving all of the tax money spent is justifiable. However, the lack of any prior or post grant/credit/exemption study or even substantial anecdotal evidence does tend to support a view against tax subsidies.

          • you are quite completely mistaken in suggesting that the taxation isn’t as great as the incentive.  Why do you think the incentives are offered?  Just the income tax on the highly paid employees is a huge incentive for the government to attract such industries.  I worked in L.A. for 15 years – taxed at a much lower rate – because Canada couldn’t compete.  Now Canada does compete, and it is good for the tax base, and good for the economy.  Do you really think the government has no reason for offering the incentives?  Have you not read of how the US market and tax base is suffering because of the unfair advantages in Canada.  California is unhappy because they are *losing* revenue to Canada.

            You are really, really confused.

      • you speak from clear and deep ignorance.

  7. This comment was deleted.

    • Oh go buy an ad.

  8. I think it’s mostly because the industry has billed itself as a form of “art”. And since our governments provide most of the funding for painters, sculptures, music, television, and movies, it simply follows for them to subsidize video games and those who make them. 

    Of course all of these subsidies should go the way of the Dodo, but that won’t happen anytime soon, since the arts communities in this country have completely given up on ever being self sufficient, and have convinced many that they’re somehow a necessity to prevent Canada being taken over by America.

    • I agree. Video games are art in the sense that any entertainment is art. Whether a game is art in its own right is debatable. The Canadian politician’s obsession to throw tax payers’ money at anyone claiming to provide Canadian cultural content has always puzzled me. How any video game developed in Canada actually has Canadian cultural content defies explanation; especially considering most games are culturally neutral, somewhat to very Japanese in flavor, or blatantly based on American military or sports themes.

      • it has nothing to do with Canadian content, and everything to do with attracting revenue and tax dollars to Canada.

  9. Excellent article Jesse. The subsidies provided game development companies are ridiculous given the very small amount they contribute to society (and, given the studies in obesity and attention deficit disorders amongst children and young adults, seem to take from society) and the huge amount that a very few profit from it. 

    Your description of game coders as “grunts” is, for the most part, an apt term. Very few are physics or mathematics experts or have any other elite skills applicable to medicine, engineering, or education. Ask the average game coder what their thoughts are on using genetic algorithms to rapidly produce 3-D mapping of protein fold structures in virus mutations and prions and the response will be: “Huh?”. Most games are derivative from previous efforts and utilize code libraries and engines that require more effort than knowledge (the only programmer that I know of that coded a game from scratch using 3-D trigonometry and physics simulation mathematics is me).

    Except for the artwork, and this is often similar or derivative too, games are all based on the same formats and modes of play: 2-D/3-D maze with points/powers/keys, first person shooter, role playing. There is nothing new under the sun, or the 40 watt bulb in your Mom’s basement. I also severely doubt that all of this tax money largesse will result in the next cancer cure, a breakthrough in space exploration, or a nearly free, non-polluting energy source.

    Having been inside a couple of game companies your description of “unshaven game devs in funny Internet t-shirts” is completely accurate, although it is a little bit mean spirited. The t-shirts are usually a little more sophisticated than that. One of my favourites is the hipster ironic themed yellow with black lettering stating: “I’m Special!”. Although something like the vintage “I shot J.R.!” or an original Atari logo t-shirt are far more uber-hip in the game coder micro-culture.

    I’m not sure the code-monkeys (to the non-programmer reading this: it’s not a derogatory term in IT circles) overseas will be all too quickly trained (or are wanting to be) in game production, especially in Bangalore. The Hindu culture tends to place great emphasis on their best and brightest to achieving a classical professional status: doctor, lawyer, engineer, accountant. The list includes computer programmer and IT analyst but, in a more traditional and respectable business services or application development capacity. Gaming may be beneath them. Also, I do not believe India does, or ever will, provide similar subsidies to video game companies. Despite the comparative lack of wealth, India DOES want to promote efforts that will result in the next cancer cure, a breakthrough in space exploration, or a nearly free, non-polluting energy source. Unlike our politicians they have more sense than money.

    • Bro, you know how to troll like a boss.

      • It’s my gift, it’s my curse.

        • It’s okay to not know what you speak of but you might want to do more digging. Less reading of bullshiet stories like this will do you better in the long run, son. Learning from the actual Code-stars themselves is better then stuff like this my son. 

          • What exactly is the BS in this article? I’ve read three supporting pieces that report the same facts. A counter argument requires facts not summary declarations. Explain rather than decry.

            What are “code-stars”? If you mean game programmers I’m sure they could provide all sorts of information about programming. I’m not certain what a “code-star” could teach about tax subsidies.

            But the article is about taxes and the industry exploiting tax breaks and questionable political choices not gamers, game tech, game coders, or game coding.

            The only mention of the coders is that they are mostly the hardworking code mechanics that they are, not elite engineers that are necessary to subsidize to keep the country internationally competitive and the likelihood that once these subsidies end these game companies will reward the taxpayers by moving everything overseas because equally good programmers will exist there for far less cost.

            You are tiring
            so I am retiring.
            Giving up on
            your training 
            in critical thinking. 
            So I can get on
            with some critical drinking.

          • my first reply to the article was the third or fourth comment.  You appear to have missed it.

    • you are quite wrong here.  My degree is in Mathematics, and most of my peers have PhDs. There is a weekly discussion group at work to discuss and present novel concepts in AI methods, which are indeed applied to the work we do.  The current title I am working of has used such methods for automatically testing the tracks we are generating.

      “Code-monkey” may not be derogatory to IT professionals, but then, IT professionals are generally not Software Engineers.  the term doesn’t really apply to their work, which is the (demanding and skilled) work of creating and maintaining the systems used by the Software Engineers.  We have both at work.  Most IT professionals I have worked with would know that it is derogatory to refer to their coworkers as such.
      Your ignorance is clear, and deep.  Having worked at many studios over the last two decades, nothing of what you describe second hand is reflected by what I know first hand.

  10. Hey bud. You are one very big douche bag. You’re poorly educated about the gaming industry, douche bag. Now why don’t you sit down, think, re-write and do something productive douche bag. 

    • Wow, displaying that much combined umbrage and hubris along with that level of eloquence and sophisticated debating skills. Are you a game programmer? The industry should use you as a poster boy to explain as to why tax dollars should pay 37.5% of your salary to build yet another, further FPS based on an alien invasion scenario rather than subsidizing the training of nurses or community services for the marginalized or improving schools.

      When I have an issue with an article’s facts I present a counter argument citing resources of verified data and providing references and supporting materials. I have to admit your technique of simply calling people names is much less effort. Do you use the same method to, instead of running unit and recursion tests, fix coding bugs by yelling derogatory epithets at the computer?

      Go buy a t-shirt that says “I’m a douchbag”. It would be ironically hip.

      • You seem like this douche bag Jesse too. Did you know that you to are a douche bag? So douche bag I’ll let you in on a little secret here since you want to jump to douche bag conclusions.

        1. I’m not going to EVER be a game programmer because I just don’t find it entertaining enough for me. I would much rather be the voice of the Captain of the Ultramarines, Captain Titus. 

        2. Im pretty sure you you’re trying to talk about the American game industry. With the Call of Duty being the number one FPS as much as I hate it.. With other companies copying it. 

        3. You seem like you have sand in your ass. Did someone not hug you as a child? 

        4. I would love for 37.5% of my salary to be paid by yet another shitty FPS but what about the guys that made Dragon Age? Mass Effect? What about the people that took the initiative to make something new instead of making clones? 

        The people that get massive amounts of money are the higher ups. The programmers themselves are living lives like most of us. Just trying to live day by day.

        so before you go flinging your epeen around maybe you might want to actually meet some of the programmers in person before making your absolute moronic statements like a douche bag.

        Did you also forget that GAME PROGRAMMERS are the ones that are making the simulations for education and enhancements for human living? Oh!! Whats that?! Your new surgeon  is using a computer controlled device made by gamers to save your life? Shiiiii. Who woulda thought?

        Not only to mention the military is ALSO USING GAMING TECHNOLOGY!!!! So when we either go into war or just do surveillance WHATS THAT?!?! GAMING TECHNOLGY?! WHAT?!!? 

        Oh! Last but not least! GAMING DOES IMPROVE SCHOOLS! 

        For one it’s a social thing. So it brings a majority of people together to have fun. When I was in high school we had a place with a bunch of Xbox’s and Halo 1 and 2. We played the hell out of it just for kicks and giggles between classes and after school WE DID IT AGAIN! 

        Gaming can be creative and teach anything you want it to. Hell you can teach history, economics, warfare, survival and more!

        JUST OPEN YOUR NARROW MIND AND THINK FOR YOURSELF!

        • Please get this through your head: The article is about dubious tax subsidies. The game industry is incidental. This could have been about oil, sports teams, film production, corn and other crops, financial institutions, the automotive industry. Write a high five figure cheque to Canada Revenue and see if you don’t pay a lot of attention to government waste afterward.

          No one is against the games or the programmers.

          Yes, they do a fine job producing entertaining content and work darned hard for their pay. I resent that the owners of the company are provided my tax money to pay them so that they, the owners, can pocket the difference. If this tax was out in the open so that every time someone else bought a video game your paycheck was billed the amount of the 37.5% subsidy of the developers pay, would that be fair?

          Yes, the military uses game inspired tech. I was in the military and was recently recruited to write computer based virtual combat simulations for infantry training.

          Yes, virtual simulation tech that was developed for games is used in computer controlled devices for micro-surgery. I’ve written several articles for Intel on developing computer embedded technology and specific developer guidelines for developing computer embedded medical devices.

          Yes, games are a great social hub and can be beneficial in many ways, if not abused, on top of just being fun.

          Yes, games are used to teach and not just for small children. I wrote training  material for IBM and wish I could have had the interactive capabilities a game engine would have provided back then.

          I am critical of the business and accounting practices and the apparent lack of social responsibility gaming companies have and the government’s support of this. I am not critical of games or the beneficial uses of derived technologies. It’s just like that I’m against war but would not end the use of reconstructive surgery due to it having gained so much of its advances through fixing wounded soldiers.

          Now, calm down, open your mind, stop calling people names, do not take things personally, read something twice and research, learn about and then think about the argument before getting upset, don’t get upset, and play a video game to blow off some of that pent up anger.

          • Lolwut?

             ”No one is against the games or the programmers.”

            I would like to claim bullshiet right here. For one simple fact, that… You’re against them. 

            If you are not against them then you wouldn’t be spewing forth your lame “Blah blah blah they get paid with my taxes BLAH” 
            I myself am happy they get paid with my taxes. They create more then just games WAAAAY more then you will ever begin to comprehend. Not only that but from what these companies do I would sure as hell hope they get more then what they do now. Companies like Relic, Hothead games, Ubisoft and smaller companies that should be well recognized. 

            “Yes, they do a fine job producing entertaining content and work darned hard for their pay.”

            Good, then shush.

            “I resent that the owners of the company are provided my tax money to pay them so that they, the owners, can pocket the difference”

            I’m happy that the artists are paid, the coders are paid and every other person, even the janitor is paid with my tax money. Hell I even buy their CE stuff if I like them enough.  

            The only 2 companies that I can think of that would “Pocket the difference” Would be EA and Activision. Maybe Atari but I wouldnt count on it. 

             ”If this tax was out in the open so that every time someone else bought a video game your paycheck was billed the amount of the 37.5% subsidy of the developers pay, would that be fair?”

            You have the choice to or not to buy it. I wouldn’t care on a personal level. Not one bit. If it’s something I chose to buy then I would need to suffer with the what I choose. 

            “I am critical of the business and accounting practices and the apparent lack of social responsibility gaming companies have and the government’s support of this”

            LOL Man oh man! Too easy. Gaming companies are very open as to how much they make. Its all about the epeenery.

            So you and EA have something in common :)  

            Also are you a taxman yourself? Think about what you get paid with if you are. :)

      • the subsidies are justified by the tax revenues generated.  these revenues are used by the government for things like social services, health care, and education.  That’s how it works.  You attract money.  You tax revenue.  You pay for stuff!  Hey presto! The incentives are magnified, and important.  Yay!

  11. the_puppy is 100% right in saying that this article could have been written about any number of things that receive any sort of hand out in this great nation of ours, but the point is, the industry targeted specifically by this article, both users and creators, is a very, very vocal group. Advertisers want higher page views, so write about something guaranteed to get a higher count.

    The real question is– at least in my mind– why film continues to get handout’s. In terms of production costs, almost anyone can afford to spend 5 grand and produce something of high quality IF they throw the effort in. Why do these folk need grants in 2011?

  12. Well, as a professional working in digital entertainment for the last 20 years – 15 in film in L.A., and three in games in Vancouver, I would like to correct you on a point.  Specifically, games are *not* made by “code-monkeys” (an offensive term, I must say).  Games, like most entertainment content are made by producers, artists, *software engineers*, audio engineers, coordinators, and a whole bunch of other non-code-monkeys.

    It is deeply uninformed to suggest that Bangalore-trained code-monkeys will be sufficient to draw the creation of this type of content away from Canada.  The people who make games are a highly-trained, and highly sought-after group, who – as I have done – are free to work where they like, due to the huge demand for their skills and experience.  It is actually a fairly small community of skilled people who have the experience and skill necessary to produce quality content.  Employers like mine (named in this article) do a great deal to attract the best people, and location is a big part of any company’s allure, or lack thereof.  We in this industry (as anyone) prefer to go where we can raise our families with health and prosperity.

    Your suggestion that – with sufficient training – any monkey can be given the skills and experience necessary to create these products echoes earlier bleating around the Film Industry, which was also proclaimed to be heading overseas over the last decade or so.  And yet, Games, and Films continue to be created in North America – generating ever-greater revenues, and employing an ever-larger force.  Those tasks which are outsourced are relatively small, and do not depend on skill, nor experience.  They are akin to the in-betweeners of hand animation – filling between the key frames handed to them by the highly paid and sought-after artists.  In fact – as these workers from other countries gain skills through experience, they find themselves in a position to demand better conditions, and that hikes the costs associated.  Those who gain the kind of skill needed to really thrive as content creators generally move to countries which better-reward them for their craft.
    I worked for years in L.A. – leaving my Canadian home with some hesitance – not out of any love for the U.S., but because Canada could not compete with the conditions and compensation offered by the industry in the U.S.  It is with great joy that I find Canada to be now more competitive, and I am greatly relieved to be back home in Canada.  It is only because of the incentives offered by the Canadian Government to these industries that Canada is in any way able to compete, It would be a terrible thing for me, and for the industry in Canada if that were to change, as then I would need to move my family to a country that is better able to attract the kinds of skills and experience necessary to create content for digital entertainment.

    This article is – first of all – offensive in the disparaging terms used to describe some of the most talented, intelligent, and skilled people in the world.  Second, it seems like it was written after a weekend of skimming trade magazines for research.  It shows great ignorance of the subject, and unfortunately conveys that ignorance to its audience.

    • Thank you for this.  Unlike the article, it was very informative. 

    • +1

    • I’m suprised “the_puppy” has not said anything about this yet.

  13. Oh yes.. because there are plenty of examples where outsourcing creativity was a huge success. And that’s not even taking into account the disparity of quality in engineering between western and outsourced programming.

  14. good heavens…  The_Puppy:  The money made by games companies in Canada are taxed in Canada, and that tax more than repays the subsidies.  It’s as simple as that.  I read much of your ill-informed replies below, but tire of answering them individually.  It is glaringly clear that you do not know the industry, and you don’t understand why the government would wish to attract it to Canada.  I have worked in the industry for 20 years, and – while it may not be the most socially redeeming industry, I’ll agree – it makes a *Hell* of a lot of money.  The incentives paid to generate that money in Canada are generously repaid by the taxes it reaps.  Taxes which – we would hope – would be used by the government to pay for the social programs that make Canada such a wonderful place to make games.

  15. the_puppy:  Check this out:

    http://www2.macleans.ca/2011/09/15/in-praise-of-video-game-subsidies/

    “The answer for Canada, both empirically and anecdotally, is yes. According to a recent study compiled by SECOR for the Entertainment Software Association of Canada—to which I contributed some input—the games industry here employs 16,000 people and will generate $1.7 billion in economic activity this year. That’s not revenue, it’s the amount of dough it contributes to the national economy. At that rate of return, the hundreds of millions the provinces have doled out in subsidies will be repaid in short order, if they haven’t already.”

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