Ubisoft CEO Unsure Of Montreal Studio’s Future After Subsidy Cuts

A few weeks ago I pondered if cuts in Quebec subsidies would trigger a migration for games and VFX studios in Montreal. IGN reports that Ubisoft’s CEO is seriously analyzing the cuts and :

Quebec is cutting back on $500 million in subsidiary bonuses, La Press reported, which will cost Ubisoft Montreal and Ubisoft Quebec large quantities of government-funded production dollars. Ubisoft Montreal CEO Yannis Mallat told IGN, “I think we need to analyze with this means for us. Then once the analysis is done, we’ll be able to decide what the next stage is for us.”

I laughed out loud at the term “subsidiary bonuses”. Let’s be clear, these are government subsidies where the taxpayers are paying 37.5% to 60% of people’s salaries who work in the games and film industry. In the long run this is completely unsustainable and Mr. Mallat’s stunning admission is a great example of that:

“I think what Quebec has become over the years in terms of video game development, it’s not a hotbed,” Mallat said. “So obviously this tax program was here to help build that environment. So we see this program as an important reason for the growth of the sector in Quebec.”

Since 1997, Ubisoft was one of the first companies that benefited from massive taxpayer subsidies for the games industry and has gone on to make huge profits on immensely popular video games. The fact that a mere 20% reduction in these subsidies is enough to place doubt in the studios future shows that there probably never will be a sustainable games industry. Now combine that with VFX studios that make much smaller margins in a province that offers much larger subsidies to US studios and you can see why I’m very curious to know how places like Framestore, MPC, and Cinesite will react.

Of course as I’ve learned in the industry, any statement from a CEO has to be taken with a grain of salt. This is the same company that complained it would double the work to add more female characters to games. Ubisoft can still survive and make great profits in Quebec without taxpayer support but the hope by many is to intimidate the Quebec government into blinking and rolling back the subsidy cuts. The film and television industry along with the local unions are already beating that drum. Subsidies are a problem, not a solution.

Soldier On.

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23 Responses to Ubisoft CEO Unsure Of Montreal Studio’s Future After Subsidy Cuts

  1. polyphemus says:

    Isn’t this the studio that abused loopholes in regards to keeping employees always on training to gain credits with the local government?

  2. Hehehehehe says:

    Almost took a job there but took one at a rival studio. A few months later it shutdown. I feel differently about game studios recieving subsidies because they tend to pay their employees better and the overall quality of life is better vs game studios. Plus that is 2000+ people who work at Ubi in Montreal.

    • matteobject says:

      They’re not going to shut down, they’re just going to move to Vancouver or Toronto to claim the tax credits there and drag current employees with them.

      Anyone who doesn’t move will likely get laid off, ie. The Imageworks model.

      • jay_gould says:

        Hey welcome to the fucking party Canadians…..pack your suitcase and join the nomadic X-LA guys

  3. MTL-Anim says:

    As someone who works in the game industry in Montreal, I would predict that the other studios like Eidos, Bioware and WB Montreal would most likely to close or move first. I sensed more panic from them (WB in particular) and trying to use scare tactics to get the Gvt to backtrack.

    I just want to note that on previous posts, much was discussed about poor working conditions in some VFX studios. I can tell you that the game industry has rampant unpaid overtime ingrained in it’s culture. Maybe not as bad as what some of you have seen in VFX, but we’re definitely not an example to follow.

    http://www.penny-arcade.com/report/article/why-your-games-are-made-by-childless-31-year-old-white-men-and-how-one-stud

    https://www.jacobinmag.com/2013/11/video-game-industry/

    • Jackadullboy says:

      Wow, that second link makes for some interesting reading. The following segment is so startlingly reminiscent of our friend Pat from the previous topic, is should surely be underlined,then underlined again:

      “…One such board member was particularly big: Mike Capps, then head of Epic Games. Capps is a major figure in the industry, with Epic being a major gaming company. Rich, outspoken, and powerful, in a 2008 panel, while serving on the board, he let slip what everyone running the industry thinks but won’t say for matters of decorum.

      The exact quotes have weirdly disappeared into the ether, scrubbed from the IGDA’s minutes, but Capps stated bluntly that Epic would not hire people willing to work for less than 60 hours a week; that this was not a quality of life issue but a matter of Epic’s corporate culture, and that it was patently absurd that anyone getting into the industry shouldn’t expect the same.”

    • soldiers_friend says:

      Hey man, The Mill, London chief creative officer Pat Joseph has a good solution for all of us, not happy with VFX/Games working conditions.

      http://academy.cg-masters.com/nicks-rants-and-raves/dont-like-quit-seriously/

  4. soldiers_friend says:

    I’ve heard some 3 weeks ago from a recruiter for major European studio – having their satellite in Montreal – that they are keen to hear from artists of any level interested in relocation to Montreal. If they are serious about a career in VFX industry of course. So now, as I am guessing, a person who may have made a decision to move to Montreal to get into the industry or to follow with their career is now praying to have their job saved… And cursing the recruiters…
    On another note, if I am not in wrong, Cinesite opened their satellite in Montreal? If the ‘subsidy bonuses’ will be rolled back, Cinesite will make quite a loss – I assume – having spend all this money for… nothing?

    • vfxguy says:

      The subsidies have been slightly reduced. Framestore and MPC aren’t going anywhere.

      • matteobject says:

        Actually, a friend of mine was just working at MPC and said they’re trying to push new recruits over to the Vancouver office.

        That includes people who moved over from the UK.

        Not sure whether that was before or after the subsidy shift though, it’s possible they realized that running two concurrent operations wasn’t ideal.

      • Peter Greenaway says:

        “Framestore and MPC aren’t going anywhere.”
        They might not go, but, oh boy…I wouldn’t try to work there. 20% less is 20% LESS!!! so someone has to suffer, don’t you think? Cannot be like before when the whole pie smelled so good.

  5. Peter Greenaway says:

    Meantime, Montreal companies continue to vanish. After Newbreed and Modus, Mokko seems to be the next one.
    Not very sure about this, however hard times ahead.

  6. mspacman says:

    Ubisoft should not receive a dime of financing. Mishandling of funds, rampant institutional sexism, refusal to pay employee overtime and general innapropriate allocation of money. Besides these 500 new jobs would have been allocated to whatever buddies they would have brought over from Paris. Ironic they complain about a lack of money while at this very moment they are renting out Parc jean Drapeau and chartering ferries so their employees can get ass-backwards hammered on free booze purchased with subsidy money. All of course served to you by scantily clad waitresses per their usual neanderthal standards.

    • Hehehehehehehe says:

      Only on a VFX blog would being served booze by half naked women be considered a bad thing.

      • matteobject says:

        Right, because there are no female vfx artists?

        .. as juvenile & misogynistic as the vfx industry is, the games industry is 10x worse.

      • Hehehehehehehe says:

        There is nothing misygonistic about a heterosexual man liking boobs and having attractive women who are voluntarily employed serving them beer.

      • Jackadullboy says:

        There may however be something mysogynistic about a company endorsing that culture. I mean, can you see how women would feel alienated by it and find it well, a bit seedy shall we say… A bit crass? Know what I mean?

        We do want more women to feel comfortable joining the profession, right? Taken seriously and that?

    • vfxguy says:

      Now I want to work at Ubisoft.

  7. MTL-Anim says:

    Looks like the Quebec Government has back tracked on it’s cut, but only to Ubisoft and WB.

    The article is in french, but essentially they are saying that Ubisoft and WB won’t be subject to the 20% tax credit reduction because of a prior agreement. They will keep their 37.5% tax credit until 2019.

    http://plus.lapresse.ca/screens/4139dc58-53a4-5937-bf82-53e2ac1c606d%7C_0.html

    With the right amount of lobbying anything is possible…

    • Peter Greenaway says:

      …and today:

      “WB Games Montreal QA Team is Hiring! We are actively seeking expertise to bolster the ranks of our awesome WB QA Compliance Testing Team. Any experienced Leads, Supervisors and Managers with a strong background in Microsoft/Sony cert testing are strongly encouraged to come forwards!”
      Good to be on government welfare…

      • polyphemus says:

        NO one wants to work for games QA that’s the lowest level job in the games industry and they know it.

        Leads, Managers and Supervisors of.. high school graduates and ex-gamestop employees if they are lucky.

  8. benco says:

    I’m wondering if Sony Imageworks didn’t sign something like that in BC and secure a 10 or more years with a tax credit that can’t go lower than the current one. That will explain the move of the HQ there …

  9. Barney says:

    Ubisoft makes money hand over fist and treats their customers like crap. They don’t need any subsidies.

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