The video game industry remains a growing and vital part of Canada’s economy, with 821 companies employing 34010 people and creating 5.1 billion dollars in economic impact across the country from coast to coast, according to “Canada’s Video Game Industry: Powering the Future of Play” report developed by the Entertainment Software Association of Canada and Nordicity.
Video games also play an important part in the day-to-day lives of millions of Canadians. The industry is proud to create accessible and enjoyable games to help foster relationships between players, and to contribute significantly to the economy of every province across the country.
Like all industries, they had to navigate the challenges of the pandemic, but they have come out of that experience a stronger and more mature industry. This is reflected both in the incredible games that are produced in Canada every year, as well as the quality of jobs the industry offers, which last year had an average salary of 102000 dollars across all roles.
Economic impact
The country continues to have a vibrant ecosystem of video game companies, with 821 actively operating in Canada in 2023-24. This was a 9% decline from the peak in 2020-21, with most of the decrease coming from companies with less than 25 employees, while the number of large companies increased slightly during this time. There has not been a significant change in the distribution of companies, with video game companies continuing to operate from coast to coast. The biggest concentrations are in Ontario, British Columbia and Quebec, which contain 83% of all companies between them. While most companies remain Canadian-owned (an estimated 76%), foreign-owned companies account for 88% of the total industry employment.
The total number of video game companies operating in Canada has decreased by 9% since 2021. Most of the decline in the number of companies took place in the Micro category (2 to 4 employees), which lost a combined 111 companies. In a challenging environment, micro companies likely closed or have downsized, which may explain the growth in Sole proprietorships.
In total, the video game industry contributed 5.1 billion dollars to Canada’s economy in 2023-24. This includes an estimated 3.9 billion directly, and a further 1.2 billion through indirect and induced impacts. The total GDP contribution is 3% higher than in 2021. This reflects the fact that although employment decreased slightly, the sector has continued to mature, with more senior employees and an increase in overall wages.
In addition to the direct impact, economic activity also has what can be called “spin-off” impacts, which represent the ripple effects that an industry has on the broader economy. These impacts include indirect impacts (the employment and value added by suppliers from which video game companies purchase goods and services), and induced impacts (the re-spending of labour income by employees of video game companies and their suppliers).
Roughly 45% of the industry’s total revenue was derived from intercompany/transfer pricing. Given that most of the industry’s revenue is generated by larger companies with international headquarters, a significant portion of revenue comes from intercompany transfers, particularly during development cycles. In-game/in-app sales made up 21% of the total revenue while provincial games industry tax credits contributed 6% to total revenue. The share of revenue generated by professional fees has doubled to account for 6% of the total revenue in 2023-24. With financing challenges and uncertainty, companies have shifted, to an extent, towards service work.
The largest share of revenue for Canadian video games companies is intercompany/ transfer pricing, which reflects the fact that the largest companies are foreign-owned. Various public support mechanisms accounted for 8% of the total revenue in 2024, against 10% in 2021.
The video games industry in Canada is largely export- driven with 88% of its revenue being generated from exports, up from 84% in 2021. Exports are the principal source of revenue for most companies, with exports accounting for about 90% of revenue of Medium, Large and Very Large companies
Employment
Canada’s video games industry directly supported an estimated 34010 Full-Time Equivalents (FTEs) of employment in 2023-24. Most (83%) Canadian video games companies are in Ontario, Quebec and British Columbia. Ontario has a higher concentration of Micro companies (2 to 4 employees) and Sole proprietorships than the two other leading provinces. There has not been a significant change in the distribution of games companies across Canada since 2021.
All regions showed a decrease in the number of companies, from the cumulative loss of 7 companies in the Prairies to 19 companies in Alberta. Overall employment in the industry is down slightly since 2020-21, but the number of senior level jobs and the average salary of employees have increased significantly, highlighting the overall maturation of the industry. There has also been an increase in the number of women employed in the industry, from 23% to 26% of overall employment.
Overall, most companies saw an increase or a stagnation in their workforce. This observation suggests that the 3.5% decline in employment is due to the decline in the number of companies (consolidation, studio closures), and some substantial layoffs from a few larger companies. Most of the direct employment generated by the industry can be attributed to a small number of massive companies. The largest 25 companies supported 58% of the industry’s FTEs, slightly more than in 2021.
An estimated 26% of video games workers are women. They made up 23% of the industry in 2021 and 19% in 2019. On average 62% of these women work directly on games. Women are more likely to work directly on games when working at smaller companies.