Not Everyone Thrilled By Ubisoft Toronto Deal

Meh, I'm just happy to get more studios up here in Canada. I don't want to have to move to crummy USA (no offense), just so I can get a good job in the industry.

Kakkoister

I live in Toronto. Why can't the gaming community be happy that UBISOFT is expanding? Why y'all have to hate man!

taeka22

Ubisoft is gonna kick some butt here in TO. Can't wait to see what they come up with.

@Telecinision: What are you talking about? These two topics are completely unrelated. The CUPE strike is a union problem. And you'll never find video game employees and union in the same sentence.

Marcus Gee is a bitch and he seems to have something against French People. Manges de la marde Crisse de laid!

@El Critiquel: Another point to take into consideration if you're divvying up the incentinve into individual salaries is that it's taxable income. Combining provincial and federal taxes in Ontario, on $70K/per person, works out to about 36%, over those six years the governement will recoup about $150K/per person. That totals about $120 million over six years, just in tax (though the lion's share would go the federal gov't).

@El Critiquel: Not only just attracting grads, but getting more game businesses in the province can definitely mean more money generated if employees decide to break off from companies like Ubisoft and strike out with their own thing. That sort of thing happened in Vancouver: Guys would quit EA and do their own thing, they'd make their own game, that game might do pretty well, and while the successful ones usually just get bought back up by the bigger guys again, it _does_ create opportunities for smaller game developers to flourish and for more jobs to be available.

As for the game industry workers being "cool kids"... ahaha, well. The workers may be total geeks, but I think the industry has earned its title as the hot new upcoming media industry that's flourishing. I think it's more a dis on the Toronto government trying to get with the times. ;P

owen, enough with the british spellings in brackets. IN CANADA BOTH ARE ACCEPTABLE

@Eltigro: ya that would be canadian dollars, and it's about 85-90 US cents per cdn dollar (or 1.16 canadian dollars per usd). Though Ubisoft is a european company, not american so for them it's 1Euro = 1.66 CD.

sirsri

@PeytonFoote:Considering that Montreal is the province's most English speaking city, it's pure misinformation to tout the city as being majorily French speaking.

Man, what an ass. Who cares. I for one hope Ubisoft comes to Toronto. Studying Computer Animation here in Ontario and have a few years left. Would be awesome to land an internship/job at Ubi! :>

Being a huge gamer based in Toronto, as well as a relatively small time game programmer I couldn't be happier about the deal. I think the critic is just mad because they don't understand how much revenue the videogame industry generates. The 1/4 billion dollars could double in a year or less. Especially if they're co-developing the Assassin's Creed franchise with Ubisoft Montreal, which is a multi-million selling series.

Aidan Dammermann

"I'd say they've shown a strong commitment to the country."

Sure. They also did show strong commitment to France in the 80's, until they found it cheaper (MUCH cheaper) to cross the Atlantic and close down most of their operations here.

I still wonder why the business keep calling them a "French studio". That only contributes to make Canadian citizens angry --especially when Ubi is benefitting so much from tax-free advantages (although the Canadian government is to blame for that, not the studio).

Anyway, I bet it's just a matter of time before the French Canadian studio soon turns into a Chinese one (Eastern Europe being way too expensive these days).

The fact that it's UbiSoft and not a company with less of a foothold in the country should assuage concerns. With two other studios and 2,000 other jobs in the country (including the Montreal studio which handles the massively successful Tom Clancy's franchise), Ubi has exhibited a commitment to Canada that the country should embrace, not scorn.

RawSteelUT

I'm thrilled that Ubisoft is coming to Ontario, and I hope this is a sign that the Ontario Government is finally prepared to support the film, television, tech and software industries with a cohesive development plan that ensures growth and prosperity for the various creative and tech industries.....

I also hope to win Lotto 649 this Wednesday so I can move away from Ontario to another part of the world that truly gives a damn about their creatives.

totoro

@El Critiquel: Yep, and unfortunately as long as states compete against each other with such corporate welfare, the practice will continue since no politician wants to be the first to blink and then have to explain during reelection how he didn't care enough about his community to save those jobs and/or bring new ones in. Everyone effectively pays for the redistribution of wealth in a nation, no matter who the recipient of the welfare may be. It'll take something along the lines of a NAFTA level agreement to keep taxpayers from indirectly paying their employers for the privilege of working for them.

@Eltigro: Yah its in Candian dollars(not just for Monopoly anymore).
(edit)Its not that bad looking at it, its about $1 CND to around $0.86 USD
The problem with a studio just up and shuttering is that it usually shows signs of issues. Take Psuedo entertainment, if you talked to people related to them in the months before, you would have been able to see the cracks. Game news readers would see the other issues(like games getting cancled).

Back on topic, Ubi(and their cold french roots) have a general idea of how to keep afloat. Keep busy by producing titles that sell(imagine babiez), a-listers(assasins creed 2) and the occasional experimentation(usually with an existing franchise like PoP).
If it fails selling its new titles, it'll fall back on DS shovelware that tends to sell by the bucket to clueless youths and their parents/significant others.

One reason he may be against all this is:
1) Our government, like the US government, has spent a ton of cash bailing out the auto sector.
2) We're in a recession and our governments (federal and provincial) are spending freely, with a disregard for any deficits that will occur.
3) That money can be used elsewhere (health care, infrastructure).
4) It reeks of gearing up for an election (federal or provincial).

sedimin

Is that Canadian Dollars? What's the exchange rate?

I think it's good if the jobs work out and the company stays in town long enough. It's like a signing bonus in sports. It works out fine if the player performs and lasts all season. But if they fumble too much then sit out half the year with turf toe, then it's money down the drain.

Eltigro

@Zonrith: That's the assumption I find really weird about this whole thing. Why does this guy Gee think that Ubi will pack up and leave so quickly. That is not a very typical thing to happen. Developers will move studios within a city, but leaving an area completely is a bit rare. Doing something like that can lead to a loss in a lot of the companies employees in that studio who aren't willing to move. Now is there a chance that the studio is super unprofitable and ends up having to close permanently? Yes, but that's the point of the $260 million, to make sure that doesn't happen and that the studio can be built to be successful, profitable, and remain in Toronto for a long long time.

rabbibert

@PeytonFoote: My thoughts, exactly. The Toronto gaming industry is somewhat lacking in large studios. We have Rockstar and Digital Extremes, and that's about it. Crystal Dynamics is way outside the city and not even commutable.

Anyway, Ubisoft setting up shop here will attract other companies to set up shop here, something that's sorely needed. Everyone seems to plunk down in Vancouver.

One more narrow minded analysis of a situation. The creation of a business goes far beyond the initial estimated costs and revenues.

Businesses hire people, and these people in turn become an economic system of their own.

Ubisoft has 3 other studios in Canada, not two, and everywhere the employees actually keep the entire neighborhood afloat. I work at Ubisoft Montreal, and anyone who has ever experienced the lunch time exodus in the streets surrounding our studio will understand that our 1800 strong workforce keeps dozens of restaurants and other businesses going through thick and thin.

So much that they're pretty much all offering discounts to make sure we come back. And the city of Montreal loves Ubisoft being there. And a massive urban development plan has been drawn to transform the neighborhood, which will create a lot more revenues for many different businesses particularly the construction companies.

So yes, for now the incentives may seem a bit high. But in time Toronto stands to gain exponentially from this announcement. All of us here are exstatic about this new studio and can't wait to see what our future colleagues come up with.

Furyo

I'm not sure why articles like this can't have more reality in them. For example, CDN $329,000 per job is an amount over 10 (TEN !) years. That's different than just $329,000 per job.

Also, is the $263 Million just a cash payment? I looked through news postings for 10 minutes, and no one in the press seems to know or care.

Most of these sorts of deals are just tax cuts for the company: "Move to our area and we won't charge you as much in taxes as we would normally charge." A tax cut is not a GIFT.

It's a close call whether these types of things are a good choice or not. But how can anyone really tell when all we get is spin-formation instead of facts?

Kotaku did as well as anyone in reporting this. It's a shame that standards for journalism are so low that seemingly EVERY journalist failed to report the relevant information. (I didn't read all 150 articles found by Google News. Maybe someone reported whether this is a gift or a tax cut, but I couldn't find it in the first 20 stories I read.)

"It employs bright young things, pays them nicely... "

This right here proves he doesn't know what he's talking about. People who work in the games industry, while technically and creatively smart, aren't very bright. They work long hours for less pay than they'd be getting doing the same type of work in other industries (excepting the Molyneuxs and Levines out there, of course).

Oops...this shouldn't have been a reply to this discussion.

cxmnky

@Omnimon:

jinxman

@Omnimon: Personally, my anger would be directed towards the government in this situation. Gotta love socialism. Think about it, Thats $260 million dollars of tax payer money going to make a game studio. What the hell?

jinxman

@Zonrith: You're forgetting the money that Ubi will have to spend to just set up the studio in the first place. It's not like they can just set up a bunch of computers on a street corner and pull the power they need from the air. Overhead costs will probably balance the deal out in a shorter time than just accounting for the spending of the individual.

Shabadage

@Zonrith: They are also looking at the tax revenue generated in the long haul by having a money making studio in Toronto.

@Zonrith: relocation of a developer is actually quite costly considering the developer is only as good as it's staff. Relocating even just the bare bones most important members would be a costly endeavor.

Shutting down the studio on the other hand is dirt cheap, and they don't have to worry about losing the investment cost like you do when constructing a factory.

Spenze

Without getting into whether the incentives are a good idea in this climate, I think that Gee is blowing things out of proportion. A new studio and 800 jobs sounds like a pretty good deal, not to mention that it could generate jobs and income through related business.

-MasterDex-

Creating 800 jobs in the game development sector is not the same as opening a factory in your town that creates 800 jobs.

MuppetChrist

I haven't read much from this columnist before, but it sounds like he has a problem with two things: government subsidies AND the video game industry. Even the title of the article alludes to some personal spite.

If being a 'footloose bunch' is doing what is best for your business, then so be it. The problem with Mr. Gee's argument is that he's arguing against government subsidies, and for the free-hand of the market to do what it will. Well, Mr. Gee, that free hand of the market is actually what is created by business owners making decisions. Decisions that include doing what is best for a business. So don't thumb your nose at Ubi, don't hate on video game companies because you just don't like video games, and certainly don't sarcastically mock Ubi's statement of spending $500M in your city.

Furthermore, the game industry as a whole may be doing comparatively well to other industries in this down economy, but it is by no means stable. The games industry is very volatile, and if Mr. Gee doesn't believe that, he can just visit Kotaku and flip through a few pages. Studios have been shuttering left and right throughout the recession.

In closing, Mr. Gee does a fine job of taking a stand on corporate incentives/subsidies, but his anger and spite are misplaced when he takes it out on Ubi. Quite a shame for a journalist, actually.

@ebakrevs: Ah, but the question becomes more complex when you factor in the other variables.

It isn't just 800 people added in a vacuum. You need to factor in the $260 million incentive that came out of the tax coffers.

Now, the question becomes, will those 800 workers spend enough money to improve the economy more than if the government had taken the $260 million and used it in some other, direct fashion (for example, tax rebate checks, or small infusions into the local businesses, or mass transit, etc.)?

My thought would be yes, the 800 end up investing more than the $260 million, but it's a question of time. It'll take X number of years. But, if Ubi packs up and leaves before then, then obviously in the end all the government did was use $260 million less effectively than they could have.

Zonrith

@Victoly: Is that not what the employees in the videogame industry are?

sereal

@ebakrevs: How long is the government in the red until their spending makes up for the amount of the subsidy?

MuppetChrist

@ebakrevs: Errr.. No. Well, let's assume the average salary for each person is about $70,000. Assuming he spends 80% of his money ( a highly unlikely figure, but nevertheless), he ends up spending about $56000 a year. As Owen puts it, the government is effectively spending $329,000, so it'll take 6 years for it to balance out. And in terms of actually benefiting the government, an ever longer time to actually start contributing to the government's coffers. I'm afraid i'm oversimplifying things, but ultimately the point of these incentives is more about creating the right environment for investment, rather than increasing per capita consumption in Toronto.

Well I'm really glad about this I live in toronto and this is my last year in game design program, so I'm gonna be looking for a job. Now I may be able to get a job without having to move out of the city in which I've lived in for my entire life. So the politicians can think whatever they want about this deal but I'm happy about it.

While Marcus Gee is speaking, in this instance, specifically about the video-game industry, I'm guessing he's less concerned about it being that industry in particular (and some hatred he has of it) and more concerned about corporate subsidies in general.

Here in the U.S., this has been a big deal, particularly in the auto industry. You'll see one state versus another, throwing money at Honda or Toyota to try and score a manufacturing plant and the jobs it brings.

Some people say, as Owen has above, that jobs are jobs, and they think such economic development tactics are for the best. Others think it's a waste of taxpayer resources and an unhealthy practice for other reasons (animosity between state governments, other businesses may expect/demand tax dollars to remain in place, etc.).

Now, the one thing about the auto industry, or pretty much any heavy manufacturing, is it can be difficult for them to pick up and leave...but it's still possible. Industries that are very human-resource oriented (like video games, or any programming job, or a telecom's headquarters, etc.) are relatively inexpensive to move from place to place. So, while I personally don't come down on one side or the other regarding tax dollars for economic development incentives (sometimes I agree and sometimes I don't, it depends on the details as to whether I think the move is smart or not), I do agree that one should worry more about businesses that have cheap relocating costs versus entities that may find a better fiscal offer unattractive due to the cost of new factories, heavy machines, and so on.

Zonrith

Gee seems awfully focused on the near-term here. Maybe I'm missing something, but aren't incentives a fairly common way to attract new businesses?

If we assume that Gee is wrong and that Ubisoft isn't planning to cut and run with the money (given their other Canadian studios, that seems unlikely), then the incentives are an investment in the future. They may be higher than is really necessary here, but given Ubisoft's recent track record, it seems like they'll have some extra money to contribute to Toronto's economy once the studio opens up.

More jobs = more people paying taxes to Canada, and spending their income in Canada. Isn't that usually a good thing?

spiderweb1986

@Telecinision: That's just the thing with these type of deals. Anytime there's a crisis going on, the Government does something like this to thwart out attention from the real problem.

Here in New York City our education is at low, drugs are out there and it seems what we've gotten out of it is two baseball stadiums with a basketball stadium in a couple of years to follow. It's hard to praise any Countries government when you know they usually have their own agendas.

@vid3oman64:
sry it was a typo yo

Stealth_chill

While he may have a point about the high deficit, but if I remember correctly, Ubisoft is going to use this studio not only for developing games, but also for sfx and as a general media development studio.

It's nice to see the government supporting high industry, and the presence of a large studio like this, has a domino-ish effect - Because of the new job openings and renewed interest, there will quite possibly be a rise in the number of graduates interested in the video game industry, and looking at the growing pool of dedicated young grads, more and more companies will be interested in opening their studios in Canada, creating a very productive cycle. In that vein, this is akin to a long-term investment by the Canadian Government, and also a very welcome boost to the image of Canada as a country where tech investments are welcome.

P.S: Since when have video-game industry workers been "cool kids"? o_0

I read the article and it seems the writer is more concern with Mr. McGuinty's pension for throwing away money than gaming itself. Apparently the Government has funded many ventures only to move on when it fails, a $260 million incentive package will affect the average worker of Toronto.

Great that so many jump aboard and praise the Government and Ubisoft for the extra 800 jobs but at who's expense? I live in America and when the government supports a project it comes out of our pockets.

@Stealth_chill: LOSING

ONE O

L-O-S-I-N-G

I hate that...

vid3oman64

@Victoly: Actually, to be fair, when reading the actual government he singles out investments in the aerospace and biotechnology fields as well as the arts, so his attack may not be all that biased. That said, there IS still a lot that's offensive in the article, such as how he refers to people who work in the video game industry as "bright young things."

Victoly

@Stealth_chill:
I'm sorry your respect for the company is falling? I have almost no respect for the company at all. Why? you may ask. Because I am a Nintendo fan. And aside from No More Heroes, which was only published by ubisoft, and maybe 1 or 2 other titles for Nintendo consoles, ubisoft has been putting out shit.
While I think what they are doing here is good, I still dis-like ubisoft immensely for the shit treatment they have giving not only the Wii but the DS as well.
Note: I do look forward to red steel 2.

I agree that this attack against the video game industry seems unfair, especially since unemployment has been particularly high in Toronto and the rest of Ontario since the economy went out the window in the US. So people who already have jobs have to "pay" (i.e. have the money they already pay anyway in their taxes allocated in a certain way) to help those less fortunate find work? So what! Not only is this an unfair attack on the video game industry, it's classist and elitist as well.

Victoly

800 more people with income means 800 more people to spend more money. It's simple economics, you had to take it in high school.

Doesn't seem like the right timing, especially when a lot of city workers are on strike, garbage isn't being collected and parks aren't being maintained.

http://www.thestar.com/news/gta/article/663812

Telecinision

"Gee says developers are notoriously "a footloose bunch," and nothing prevents them from bolting for a better deal should tax or currency conditions change." Except that I know a LOT of people working at EA and Ubisoft Montreal that would love to go back to work in Toronto. How's that for "footloose"? Add to this the fact that it will also attract developers from all over the world, since Toronto is an English speaking city, something that kept some people away from applying in Montreal. In the current economic condition we're in, this is the kind of investments we need. Not billions of dollars thrown in blackholes like the finance industry in the US.

PeytonFoote

Wait wait wait.... Video game devs are the cool kids now!? Wooo! Finally!

kosikutioner

IT's good that ubi is offering alot more jobs, but my respect for the company is falling. They think that all their games are loosing their luster so they need to re-do the whole series. Like Graw, R6:V, and now splintercell Convictions.

Convictions looks awful. It looks nothing like the game i loved. People are all over this game and i can't understand it. They show you something shiny and you run towards it. Ugh, but this is a discussion for another day. I feel like im going to off-topic here. Sorry.

Stealth_chill

Of course the columnist with the $329000 statistic (David Olive at The Toronto Star) also says Assassin's Creed is based on a Tom Clancy novel. Granted the statistic could be true, but I don't have confidence in his fact checking. It comes off reading almost as an uninformed rant.

@Kaminari: Actually, the studio was started by the Guillemot brothers. They are from France originally.

@SG79: I realize it's past the whole no offense bit, it just makes it sound a bit less rude :P.

And no, any new studio is a plus because it builds up the general studio base in Canada. And I really don't care what country the publishers come from.

Ubisoft a french publisher? Lol? And Toronto, Ontario is hardly french. Most of the french live in Quebec. Even with their huge studio in Montreal, that's not enough to be considered "French".

Kakkoister

@Kakkoister:

See when you refer to a country as "crummy", you're past the whole "no offence" bit genius.

This is a mere international studio of a French publisher, so I would think you'd prefer new Canadian development houses that aren't owned by US publishers.

@-MasterDex-:
honestly, we in Canada that arent in the manufacturing sector are not hurting for jobs. Its the factory workers here that are ALWAYS at risk whereas construction is always happening somewhere in the country and service industry is always hiring. Those 800 jobs are not significant to the economy in the least

anduin1

Some do have a valid criticism that Quebec invested merely $19 million in UbiSoft and they in turn created more jobs.

"I'd say they've shown a strong commitment to the country."

I'd only say that if they did Canadian content games, which they don't.

diverguy

This is a great deal for Toronto for a lot of reasons Gee conveniently (or ignorantly) dismisses.

1) The term of the contract is $260M over 10 years. That ensures some permanency to Ubi's tenure in Toronto.

2) Ubi itself is investing $500M in this project so its hardly the one-sided deal Gee alludes to.

3) The total economic ROI on a $329K subsidy for an employee who'll probably be making $70K+ per year over 10 years is actually really good.

4) Ubi will act as an "anchor" for the gaming industry and other entertainment sectors in Toronto for a long time beyond the 10 year deal. 800 well-trained workers today means 800 people who'll be qualified to attract future developers or form their own start-ups. And the corporation might leave, but the majority of the people will stay.

5) "Corporate welfare" isn't the myth, its the "free market" that is the myth. Gov't has always been the biggest investor in industry in one way or another.

@Kakkoister:

The company started out and is based in France... so that makes them, you know, French:


http://en.wikipedia.org/wiki/Ubisoft

I am glad to see Ubisoft open a new studio in Toronto and honestly I don't see why this would be a problem. There are plently of talented people in the area from the universities and college's in the area and only a small number of studios. The more that stay in province the better. And considering how hard Ontario is being hit by the current economy we need to bring in other industries to offset the hit's we've been taking in other sectors like the auto industry.

If these guys are making a profit, continue to do so, and provide decent stable jobs for 800 people, I think it's pretty decent consider the province gave auto makers like GM Canada and Crystler Canada that are failing more than 10 times that amount combined

UnknownHero

@Eltigro: Roughly $225m US (the Canadian dollar has been going up and down in the past year and a half). That's still a pretty healthy shot to the video game business in the Toronto area. I'm personally not a huge fan of the provincial government but it's something. They're giving money to GM they might as well invest in an industry that actually has some growth in it.

@Eltigro:
1 Canadian Dollar = .85 US Dollar
or something like that

zorsmobile

I think the money would be better invested in the video game studios already implented, 800 jobs is 800 jobs even if it's divided with in studios instead of given to one. Ubisoft just isn't a very safe bet... heck, any compagny who needs you to pay their employees for 5 years isn't exacly the one you want to bet on....

SanvaliDawgschidt

The news of Ubisoft being given a subsidy to open the new studio was met very differently than I had hoped when I read the news. I saw news reports calling the subsidy a bailout (a la GM). The media questioned why we were helping a video game company but I saw no question as to why I'm helping an auto manufacturer

Sabin