Staffing costs rise in wake of competition for games developers in Montreal

Electronic Arts (EA) is growing more quickly than anticipated in its new Montreal studio, but its presence is causing an uncomfortable price war for talent in the area, according to one smaller player. Last summer, the games giant announced plans to open a large studio in the heart of Montreal, with the intention of hiring 50 to 80 project staff every 12 months for four years (CNM, Aug. 28/03). Montreal studio GM Alain Tascan tells CNM that 50 developers are already employed at the site, and that it will likely exceed 100 by the end of the year. Tascan says he’s pleased that many Quebeckers have chosen to come back to the province from elsewhere, and he’s attracted developers from Los Angeles, San Francisco, Texas, the United Kingdom, South Africa, Finland, France and elsewhere. Two titles, Goldeneye and Medal of Honor, are keeping about 40 developers busy, while a little more than 10 are occupied on a new title that Tascan won’t disclose. The company’s 23,000 square feet in Place Ville Marie appears to be only about half full, and there is room to expand to other floors, Tascan says. The company has widely been seen to be in a heated rivalry for staff with Ubisoft, which also has a significant presence in Montreal. This winter, the French company said it would add 200 employees to its 800-strong roster as it works to finish 15 new games by the end of this year. The two companies have already locked horns in the province as Ubisoft sued several developers who left the firm to go to EA. Tascan is unapologetic for the staffing war that’s evolving, though he downplays HR as an impediment to growth. He says EA has a 24%-25% share in the games market, and more than $2 billion in cash reserves. "It’s still a cash-making machine," he says of the industry, despite pressures on salary created by market demand. One smaller games developer, however, disagrees that the competition is entirely good news. A four-minute cab ride away from EA’s studio, DC Studios’ partner and CEO Mark Greenshields says the competition for developers has him contemplating a move away from the city. DC Studios has 40 developers working on a wide range of for-hire projects, but salary pressure is threatening the viability of the thin margins that come with service work, Greenshields says. He estimates that salary costs have been driven up in the past year to 18 months, largely the result of competition between Ubisoft and EA. "There is a brain drain, it’s common knowledge," he says. The company could be less susceptible to rising salaries, Greenshields says, if it is successful in creating its own intellectual property. In fact, the company is actively working to develop original intellectual property, and new financing will likely be announced within weeks, he says. Still, as he contemplates expansion, the competitive landscape is increasingly frightening. "Montreal is not a cheap place to run a video games studio," he says. "We will open a new studio, but it probably won’t be here." Schools have increased the number of qualified young graduates, he notes, but "they can’t ramp up that fast." Further, senior developers are in short supply. But, he insists, he will continue to operate in the city. "We’ll still be here. We’ll still be strong here," he asserts. Against this tension, the Alliance numériQC has scheduled a widely-anticipated games summit for mid- to high-level development professionals to discuss the industry. To be held November 3 to 4, the summit will examine game programming, visual arts, game design, and production and business aspects.

Staffing costs rise in wake of competition for games developers in Montreal

Broadcast | May 28, 2004

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