“All your Base are Belong to Us”: How Canada is Taking Over the Gaming Industry from Japan

©iStockphoto.com/Adam Filipowicz

As a Post-Graduate Research Fellow at the Asia-Pacific Foundation of Canada, I find myself often engaged on exciting cross-regional issues. Politics, security developments, and economic crises make up my daily routine.

But so do video games.

As regularly as I check BBC or Al-Jazeera for the latest headlines, I also visit the latest gaming media websites like IGN or Gamespot (at home, of course!). I eagerly consume the latest updates on my favourite games and check and re-check the release dates of highly anticipated triple-A titles.

Which is why last week, I spent many a sleepless hour watching the biggest gaming companies like Nintendo, Microsoft, Electronic Arts, Sony, Ubisoft and Activision-Blizzard showcase their latest gaming iterations and newest IPs at the industry’s biggest event, the Electronics Entertainment Expo in Los Angeles (also known as E3). The companies all tried to outdo one another, and were not only competing for the coveted ‘Winner of E3’ prize, but also for the incredibly short attention-span of the average gamer. In the past, companies like Microsoft have gone so far as to reunite the Beatles on stage, while this year’s show included an extensive, though ultimately futile, song and dance number from Usher.

But as I was watching this year’s presentations, one thing became increasingly clear. A few years ago, the games I was excited to get my hands on (the Zeldas, the Metal Gears, and the Resident Evils) were produced by Japanese developers. But recently, and especially this year, the games which really excite me (and the majority of gamers) are being produced by North American companies, and increasingly, are Canadian.

Canada’s gaming industry is the third largest in the world, following Japan and the US. According to a recent Entertainment Software Association of Canada report, in 2011, the 348 video game companies currently operating in Canada directly contributed $1.7 billion to the Canadian economy. Overall, the industry employed approximately 16,000 people. Unlike the economic downturn other tech companies are facing, the gaming industry in Canada is expected to grow 17% straight through 2013. The video game industry is now the largest industry in entertainment, even topping the film industry. To illustrate this point, publisher Electronic Arts reportedly dropped between $200 million and half a billion dollars to produce its Star Wars: The Old Republic game, which was developed by Canadian company Bioware.

…half a billion.

In terms of pure cultural impact, over 59% of Canadians play video games, with 47% of Canadian households owning a gaming console and 30% of gamers playing at least once a day (with a roughly 50-50 split between males and females and an average age of around 31 years old). The industry’s presence in Canada is everywhere, and not only are companies increasingly found across Canada (I pass both EA and Radical Entertainment daily on my morning commute), but Canada itself is now featured in the virtual world of gaming.

Compare this to the state of Japan’s gaming industry. In 2011, revenue from video game console and software sales in Japan dropped 8% from 2010 and revenue overall has declined for the fourth year straight. Industry titans like Keiji Inafune (co-creator of Megaman) and Hideo Kojima (creator of the Metal Gear series) have become increasingly critical of Japan’s gaming industry and have stated that the lack of innovation and global outreach found in Western gaming, but absent from Japanese gaming, is crippling Japanese developers. Others have been more vocal on the issue.

A global power shift in video gaming is occurring. While Japanese companies like Nintendo are struggling to pick up the pieces after this year’s E3, Canadian produced games like Ubisoft’s Watchdogs are picking up ‘Game of the Show’ awards left and right.

So what does this all mean? It means that Canadian developers who, as kids, were once influenced by Japanese-created games are now the ones doing the influencing in Japan. It also illustrates that, while Canada may have to play ‘catch up’ with Asia in the political and economic arenas, it is steps ahead in a select few innovative industries. And as Maclean’s recently pointed out, while there is increasing hubbub surrounding foreign ownership of companies in Canada (with particular controversy in regards to countries like China), the video game industry has already given the proverbial ‘who cares?’. Some foreign gaming companies have even experienced reverse takeovers by Canadians. Perhaps some of these trends are something we can capitalize on.

But that’s the analyst in me speaking. The gamer in me just wants to sit down and play.

Mario is no longer king. The games that I’m now excited about are Canadian-made: they are the Mass Effects, the Deus Exes and the Assassin Creeds.

What are your most anticipated games? Let me know below!

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