In 2011 alone, the entertainment software industry in Canada contributed approximately $1.7 billion in economic activity, and directly employed over 15,000 people. The Canadian gaming industry is five times larger than the U.S. per capita and many major game development studios have a presence in Canada, including Electronic Arts, BioWare, Ubisoft and Relic Entertainment – Canada boasts the third largest number of game development employees around the world and continues to be a source of industry talent. While traditional console game development continues to dominate the industry, social, mobile and online gaming is experiencing exponential growth and success. The gaming industry is focused on innovation, allocating large portions of production budgets into Intellectual Property (IP) and new technologies.
Game development and industry competition is a definite driving force for technological advancement and innovation. In recent years, the industry has seen significant advancements through research and development (R&D) in digital gaming for smart phones and tablets, motion-sensor games and cloud and online gaming. Game engine development is R&D-intensive, involving physics simulation, artificial intelligence for ‘BOTs’ and organic gaming experience, graphics acceleration and definition, and social and psychological parameters. These advancements are now being applied in “serious games” such as visualization, training, medical, and military simulation. From a user interface perspective, the gaming industry propels advancements in areas including Graphics Processing Unit (GPU) development, 3D rendering, evolutionary experience of the simulation, and high performance computing for next-generation gaming consoles and applications such as stereoscopic-immersive experiences.
Game development is well-supported from a government standpoint in Canada. Innovative development is eligible for the federal Scientific Research and Experimental Development (SR&ED) tax credit program, designed to fund and reward R&D initiatives.
Game development is eligible for the SR&ED program, especially if it considers:
- Processing power
- Simulation and motion capture
- Presentation
- Concurrency
- Cross-platform development
- Mobile or online gaming
Digital Media Tax Credits are offered in many Canadian provinces to encourage the growth of the digital media industry [list of digital media tax credits by province]. For example, Ontario’s Interactive Digital Media Tax Credit (OIDMTC) is offered to companies engaged in the development of interactive digital products in Ontario and refunds labour and marketing and distribution expenditures directly attributed to product development. The credit offers focused incentives to digital game corporations in particular, with a refundable tax credit rate applicable to labour directly attributed to the development of digital games.
Many projects are eligible for both the SR&ED and OIDMTC programs. If your company is involved in game development, game engine development or game engine applications, it is probable you are eligible for one or both of these lucrative programs. With minimal effort to your business, we can assist in determining your eligibility and maximizing your return on investment through government programs your company is entitled to.
You May Be Eligible for SR&ED or OIDMTC (OMDC) If:
- You have made advancements in processing power, simulation and motion capture, presentation, concurrency, cross-platform development, and mobile or online gaming
- You have engaged in the development of interactive digital products
To learn how the experts at NorthBridge will help you recover the costs of ideas and advancements, or if you are unsure whether the work you do qualifies for the SR&ED or any Digital Media tax credit program, contact us for more information or a free consultation.