Microsoft lays off Vancouver employees, cuts major projects
By Tiffany Crawford and Tracy Sherlock, Vancouver Sun July 26, 2012
Vancouver’s video game industry has suffered another blow, as Microsoft shut down two of its major projects.
Development of two games, Microsoft Flight and Project Columbia, was stopped by the firm, which posted its first quarterly loss as a public company earlier this month...
The cuts, which will affect 35 employees, according to Canadian digital technology news service Techvibes, come on the heels of announcements that both Rockstar Vancouver and Radical Entertainment closed their operations in recent weeks. Capcom also announced last week it was cutting seven per cent of its Vancouver-based staff. Earlier this year, Ubisoft closed in Vancouver and other console gaming studios, including Electronic Arts and Propaganda, have made significant cuts in recent years...
The gaming industry is undergoing a transition as resources move away from console games, which cost millions of dollars to produce and take many months to create, toward mobile games or casual games for Facebook, said Julien Lavoie, director of public relations at the Entertainment Software Association of Canada.
Although the industry transition is affecting jobs everywhere, Quebec has not seen the same level of layoffs as British Columbia, possibly because both Quebec and Ontario offer more generous tax incentives than those offered in B.C., Lavoie said.
In an interview with The Sun earlier this month, B.C.’s Jobs, Tourism and Innovation Minister Pat Bell said offering bigger tax credits is not a sustainable, long-term model of how to build business in the province.
“If you get into playing that game, I think it is very high risk because some other jurisdiction will come in and up the ante a bit more,” Bell said. “You just don’t win when you play that game, but when you take advantage of the natural assets you have, such as our geographic location, our proximity to the other global major cluster in California, the talent pool in the region and a competitive tax environment, then we really think you have a winner.”
He said earning business is better than buying it with ever increasing tax credits.
“Ontario and Quebec right now are in very, very difficult positions in terms of the tax credits they offer, almost to the point of really having to pay for the business and not getting any return back to the province,” Bell said.
While he agrees that B.C. has a lot of selling features, Howard Donaldson, president of digibc.org, the industry association for digital media and wireless companies in B.C., estimates that the province has missed out on as many as 3,800 jobs because it does not offer as generous a tax credit for digital media companies as Ontario and Quebec.
“Since 2008, the cost of developing games has become much more important and companies are doing more due diligence about the cost of developing games in a particular location,” Donaldson said. “As a result, some of the work that was being done here, has shifted to other locations.”
He said another 1,400 jobs had been lost due to studio closures or downsizing....
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