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CTV.ca | Canada the new hotspot for video game creators is a story about how Canada is becoming a hot spot for game development. They talk about the big three, BioWare, UbiSoft, and EA, but they also talk about other companies.

This afternoon I went to an panel at the Rotman School of Management at the University of Toronto on, “Playing with $10 Billion – The Growth and Expanse of the Video Game Industry.” (See BTG Events and Geekstreet.ca.) The individual panel presentations were not that good, but that wasn’t the point, the overall event was a peek into the business of gaming and how it is talked about in business circles. Being at the Rotman, the orientation of the panel was towards computer games as a market. I also don’t think “expanse” is the right word of the panel – nor the word the business students who organized this wanted … perhaps “breadth” was what they meant.

One feature of the presentations was that there was a certain amount of hype about the demographics of the game industry that conflated console blockbuster games with smaller adult games for PCs. They kept on repeating that the average gamer was 29 years old until one of the panelists explained the stat. What worked for me was haveing a representative spread of speakers from Alexander Manu (Industrial Design at OCAD and the head of the Beal Research Centre on Creative Strategy) to industry representatives.

Manu jammed a one hour talk into 15 minutes zipping through slides. What I was left with was an argument for rethinking the interface and gaming to turn interactive arts into an $80 billion business. He called for innovation – getting away from the console blockbuster for boys model and thinking about “extreme playgrounds” that would enable games like Pac-Manhattan. He also had a theory of play and game design that went by too fast for me to comment on.

The other speakers were from the media and industry. Marc Saltzman responded to Manu on innovation arguing that there was innovation and giving some examples. Marc, to be frank, was more interesting in the question period when he tended to gently moderate the views of the two industry people. (Marc made the point the 29 year-old stat was due to all the adult gamers who are playing things like Solitaire or Poker online, not Halo 2.)

Finally there was a rep from Microsoft who spoke about the xbox and one from Ubisoft who talked about their strategy. Ubisoft is investing up to $700 million to expand their workforce by 1,000 employees. They aim to develop not just individual games, but franchises or properties that can be safely iterated with new versions. They expect to come out with 4 new lines a year of which 2 will fail leaving them with 2 new lines (franchises) a year. Both industry reps went to lengths to stress the changing demographics they clearly have to work hard to get taken seriously in business, and there is an interesting paper there – what is being said in order to legitimize computer games as a business? Why is it compared to the film industry?

According to a report on the Video Game Market from Research and Markets,

In spite of the global economic depression, the popularity of video games continues to soar. Since 1995, when the top-selling Sony PlayStation first hit the market, nearly three billion video game and leisure software units have been sold globally. In the year 2002, 30 million Sony PlayStation 2, Microsoft Xbox and Nintendo GameCubes were sold worldwide. The global market for video games is expected to reach a peak of $35.8 billion in 2003. However, the cyclical nature of the market is expected to drive sales downward to about $28.3 billion in 2006, at an average annual growth rate (Aagr) of -0.4% from 2001.

Interesting that they expect it to drop in a cyclical pattern. Pity I can’t afford the full report which costs EUR 480.