Interactive Ontario's Ian Kelso (GamesIndustryBiz)
Q: Can you begin by giving us an overview of Interactive Ontario, and how it fits into the the Canadian games business?
Ian Kelso: We're a trade association like Tiga, but at a regional level. And we're part of an umbrella organisation called the Canadian Interactive Alliance, consisting of seven new media organisations that includes Alliance Numerique and speaks on federal issues, and consists of the heads of the different associations together. I'm also the current president of that.
We have about 220 companies in Ontario in the interactive digital media space. About a quarter of those are in the videogame business, and that's grown substantially. We started the organisation in 2001 with nine companies and we grew incrementally for a few years. For the first three years we were mostly just a volunteer organisation and we ran a few lunchtime events and speaker series'.
But in 2005 we really took off, we started a multiplatform interactive conference and grew year over year doing more events and things like trade missions – going to markets, networking and working with the government on policy stuff. We started as a provincial organisation, and we'd like to see more activity at the federal level, but unfortunately that hasn't been forthcoming. And we've certainly seen a lot of change in the province in terms of growth in the sector, the gaming industry has got huge momentum behind it right now.
Q: What are the main priorities of Interactive Ontario?
Ian Kelso: The overarching goal is to help our companies do better business and we've been doing very specialised events that bring more focus to the industry every year. One of them is Game ON: Finance - it's a smaller event than the Montreal International Games Summit, there was about 180 people this year and attendance was up 40 per cent. It's only the third time we've done that event. Toronto is also the heart of business economy in Canada so linking that with finance around alternative platforms in games, and giving people ways of retaining their own IP, in terms of leverage with publishers, finding different ways to bring investment in whether private of at a corporate level. And then also helping companies get better tax help.
There's obviously a huge investment up front with prototype development and now there's a project about to launch with the Ontario Media Development Association, which will offset the costs of building a prototype. There was a pilot fund about two years ago which Silicon Knights took advantage of as did Digital Extremes. It was a million dollar fund - two CAD 500,000 dispersements. We have something called the Intellectual Property Development Fund, which will be launching soon. It's an entitlement fund, it's kind of like a tax credit, but it's market driven, you bring the development activity that you've done and you can get a rebate on that.
Q: How much is available in the Intellectual Property Development Fund?
Ian Kelso: It's a CAD 10 million fund and it applies to all screen-based industries so it applies to film, TV, games, interactive media. It's being rolled out for the first time and our hope is it's going to become a tax credit as well. It's been modeled that way but for the first year there are some caps on it to try and contain it and see what kind of traction it gets. It's that early stage funding that's really the most difficult to get for companies of all sizes.
Q: And what other events is Interactive Ontario branching out into?
Ian Kelso: In the interactive media space there are touch points not just in videogames but healthcare and education. We're very interested in education because it's a content industry as well and I think in games there's a lot of opportunity to bring active play into learning. That's something we're excited about. We're doing a conference in May for the first time - looking at interactivity with kids, called INPlay, and it'll involve everything from games to the broadcast convergence sector to companies that specialise in magazines and books. There's an edutainment side of it which will be very good for broadcast companies that specialise in children's programming. The educational sector is a really fast growing component focusing on getting media in the classroom.
Q: What size is that event going to be?
Ian Kelso: We're hoping to attract 200 people in the first year. Part of the event is funding through the Ontario government. There's a CAD 3 million a year fund that promotes creative clusters and it's for organisations and companies that are building events that are common good things for the industry. We got start-up funding for this conference through that fund. The kids conference has had huge interest in it from the get-go because there's been a lot of activity happening especially with broadcast and kids websites. The BBC has got one of the best kids websites in the world. There's always been that very obvious crossover between these types of platforms. We'd like to see it grow into an international conference. We'll have around 30 speakers coming internationally.
Q: There's an incredible amount of financial support, and avenues to try for different types of funding. The Canadian industry really appears to have a strong community with support, pride and confidence in itself...
Ian Kelso: You have to drink the Kool-Aid and believe that this sector is the future and it's at an emerging stage right now and that growth is going to take you to a much better place. It's the very beginning and it's only just becoming a mainstream industry. There will be more access as technology becomes less expensive so you have to think positively about the future. Regionally there are a few places that have done that in Canada and at at federal level it's just starting to happen after years and years of that education process. The federal government has been similar to the UK government and when they come on stream with something substantial it's going to really break things open in the right ways. Nobody wants to create artificial economies.
Q: What do the games companies in Interactive Ontario tell you are the most difficult stages of development?
Ian Kelso: The early stages in the games space is the most challenging. If they're going to go to a publisher with a prototype, you're investing somewhere on the scale of CAD 2-3 million on a next-generation console game up front just to get a playable demo. That's the cost of entry to even begin to sell your project at that level. How do you generate that kind of cash flow? If you're a company that has 2-4 different teams with projects in multiple stages of the development pipeline you can usually pull from projects and get the cash flow going and keep things moving - move talent around within projects.
But if you're a smaller company you need to spread equity. So companies start at the very low cost platforms like mobile, or the iPhone, where barriers to entry are low. They can create an interesting game, and then hopefully move to XBLA or PlayStation Network, then the DS. You try to work your way through and there have been companies that have done that successfully. Capybara Games is a good example of a company that has done that with Critter Crunch.
There have been some indie companies that have been tremendously successful on small platforms. Jonathan Mak with Everyday Shooter - I hear he's getting some pretty good cheques. He's got the go ahead for his second game, hired a bunch of employees and has opened up an office. The first game he did all by himself and now he's up and running. Metanet Software that did N+, they started as a two person operation with a Flash game, and brought that over onto the DS and then XBLA as a digital download game.
Q: It's a slow process but I guess a rewarding one, and the tax incentives in Canada certainly help this start-up mentality?
Ian Kelso: The market is also fickle and it can be about timing. Tax credits are great mechanism for making the market decide on what should get built and then rewarding at the completion of the project. In film they say 'never spend your own money' but a developer is usually putting in enough of their own money to take it seriously.
We've always been true believers in the talent in the region. There's always been a thriving independent scene in Ontario and a very diversified community in terms of locations too. There are some great companies in Ottawa, London Ontario, St Catherines, Toronto has been a real hub for the creative sector and the creative industries - not just games but music, film, publishing.
And the English language entertainment industry has been incredible. We've always believed that some of the interactive companies we've seen come up through the ranks - whether that's in gaming, mobile or web - there have been some really innovative and creative mixes of the technology and the artistic. Some of that has been nurtured in the small federal dollars that were there in the early years.
Q: There's a thriving indie scene, but also the likes of Ubisoft and Starz Animation in the area, and potential for collaboration with other digital media companies that don't necessarily focus on pure videogame content?
Ian Kelso: Convergence has come and gone as a dirty word – whether we call it 'transmedia' now or 'cross media' – it's still really the next-next-generation of where we're going in the games industry. If we can capitalise here in Ontario alongside some of the traditional games and film industries, and bring some of the confidences and talents of writing, directing, acting and bringing the emotional engagement into the games industry, I think that's where we'll start to see more of a collapse between the casual and hardcore games players - more games with narrative structures that are much more compelling to play.
Look at a director like David Cronenberg and consider how he might make a game. I would love to see a world that he would create in a videogame. That's the area we need to support and Ubisoft is definitely grasping that as a core philosophy in where they are headed. It's great with them coming into Toronto and the vision they see for the future, coupled with the infrastructure of the city, is going to be aligned. I'm excited by that. Look at (Silicon Knights') Denis Dyack, he's a games creator that has always brought heavy story-telling elements to his games.
The film studios in Hollywood are becoming very competitant and hiring good talent for their games projects now. Look at Paramount hiring John Kavanagh from Kuju America as a good indication of a change in thinking in Hollywood. And Jay Cohen, who used to work for Ubisoft, who took a senior role at Bruckheimer Games recently.
Q: Aside from money, what are the other challenges for Ontario?
Ian Kelso: The two challenges we face are money and talent. Demands for great talent are huge around the world. To be a successful cluster and successful industry you've got to be magnet for talent. You definitely need to have a critical mass and if you ask somebody to move halfway across the country or from the other side of the world, if it doesn't quite work out there's somewhere else for them to go. Especially mid-level talent that have families or are starting to think about having families. We've been sending animation graduates out of Ontario for 15 years to Industrial Light and Magic and LucasArts because they have such a great pipeline with some of the colleges here.
We're doing the same thing to Montreal and Vancouver now. Ubisoft in Montreal is a corridor for people from Ontario. We're letting capital leave. There's a lot of talent coming out of colleges at a low level, every college has a game course on some level, so it's the mid-level talent that's becoming a rare commodity. The project managers, the team leaders. They are the people we have the potential to lure back to Ontario once we've got a strong, vibrant community.
Q: Is there enough of that mid-level talent to go around for the region?
Ian Kelso: It depends how successful we can be in attracting talent back and attracting talent from all over the world. Hollywood is Hollywood because it became a centre of gravity for film. It's the place to be and having that Hollywood brand is what drove the enterprise and momentum. There's an opportunity here to do something similar with momentum around Ontario. Tax credits aren't the final consideration, everything else has to be there. What's you standard of living like, what's the cost of production like, what kind of supportive industries, creative communities do you have? What's that like for employees? That's how to build a successful platform for a thriving games community. You've always got to push the envelope on terms of upping your innovation and the services you have on offer, the flexibility in your production.
Looking at a future you can't just create one program, with Ontario you see a whole host of programs from all areas - finance, trade, research and innovation. You've got to have that holistic approach. What do you want to be when you grow up? That's what it takes to be a great game developer - fix on the market, understand what type of game you're making, but also be adaptable along the way.
Ian Kelso is president and CEO of Interactive Ontario. Interview by Matt Martin. http://www.gamesindustry.biz/articles/interactive-ontarios-ian-kelso-interview?page=1
