It may come as no surprise that Canada now ranks 3^rd worldwide in the video game industry according to the Entertainment Software Association of Canada.  With game studios like Ubisoft producing blockbuster titles such as Assassin’s Creed 3, and a booming mobile gaming app industry in Toronto, Canada is well on its way to rise even higher on the worldwide chart in the coming years. Canada’s success in the video game industry can be attributed to a number of key factors such as:

• University-educated creative talent;
• Desirable cities to work in;
• Canada’s generous tax incentives to help studios get the funding they need.

The majority of game studios are located in Ontario, Quebec and British Columbia due to their well-established game developer communities, and partly due to the tax relief programs available in those provinces. Canada’s video game industry is at an exciting stage in its life cycle where it’s expected to continue to keep growing and create more jobs in Canada. Currently, the video game industry is providing $1.7 billion dollars in revenue and employs about 16,000 across Canada. At the same time, it seems like the industry is shifting some of its focus from console systems such as Microsoft’s Xbox 360 and Sony’s Playstation 3 to mobile gaming platforms like iOS and Android to accommodate those new areas for potential growth.

Ontario, in particular, has several lucrative funding programs designed to further encourage investment into the province including: the Ontario Interactive Digital Media Tax Credit (OIDMTC), the Ontario Computer Animation and Special Effects Tax Credit (OCASE), the Ontario Media Development Corporation’s (OMDC) Interactive Digital Media Fund, and the Scientific Research and Experimental Development program (SR&ED).

Government funding programs are critical to the success of the Canadian video game industry, because Canada is competing on the global stage with countries like France, Korea, Australia and the United States.  It is important that Canada continues to support established game studios as well as start-ups through government funding incentives in order to make sure that we remain competitive in the global economy.

The Canadian government recently announced that it will partner with the Canadian Association of Prawn Producers to market cold-water prawns to foreign markets such as Russia and China. The partnership is meant to boost Canada’s reputation as a producer of high-quality seafood. To accomplish this, the government will invest $165,000 via the AgriMarketing program to create new marketing materials that will promote Canada’s exceptional quality natural wild shrimp to foreign markets with substantial growth opportunity.

“Our marketing partnership with Agriculture and Agri-Food Canada has helped us to re-position our product in the extremely competitive Chinese market,” stated Bruce Chapman, Executive Director of the Canadian Association of Prawn Producers. “As a result, we have been able to secure higher prices for our products, to the direct benefit of hundreds of people in rural Atlantic Canada, Quebec and Nunavut.”

Some of the promotional activities funded by the Canadian Government include providing foreign retail outlets with recipe booklets, posters and brochures that highlight the benefits of buying Canadian shrimp that were harvested from well-maintained, credible fisheries administered by responsible environmental stewardship practices.

This is definitely a step forward for Canada’s seafood market and, as a result of this $165,000 boost, the Canadian wild shrimp market is positioned to thrive in international marketplaces. Only time will tell, but with a bit of luck mixed together with the premium quality of Canada’s prawns, it sounds like a recipe for success.

The current emerging economies that businesses are aspiring to export to are Brazil, Russia, India and China or more commonly known as BRIC. However a recent article in the Toronto Star indicates that Mexico and other Latin American countries are the new hot markets businesses should be pursuing. Cited from research done by Canadian Manufacturers and Exporters (CME), the article mentions that the BRIC should no longer be considered as emerging markets, while countries such as Mexico, Chile, Peru and Columbia represent the new budding markets for Canadian businesses. This development can be attributed to recent free trade agreements between Canada and the aforementioned countries, and the rise of the middle-class within these countries.

The Canadian government offers several funding initiatives to assist businesses expand their reach into global markets. The Export Market Access (EMA) fund provides companies with up to $30,000 of eligible costs to develop marketing tools (i.e. promotional materials, electronic media), attend trade shows, as well as complete market research on developing new export opportunities. Export Development Canada (EDC) strongly recommends businesses do the proper research before plunging into foreign markets. This includes understanding the trade laws, local laws and the customs and regulations of the country. The EDC and other government institutions provide several resources to assist businesses reach their exporting goals,  in conjunction to the Canadian funding that is available to offset some of the costs associated to exporting.

Kibooco is a Vancouver digital media start-up developing an interactive platform for children to design and create their own books. As a start-up, the team behind the Kibooco vision had to develop a strategy to finance their project, and looked to a number of government incentive programs.

After being rejected for the BC Film and Media/BC Arts Council Interactive Fund, Kibooco found its first funding success in the Development phase of the Canada Media Fund’s Experimental Stream, which encourages the development of leading-edge, interactive, digital media content and software applications, receiving a $275,000 advance from the program. Cofounder Molly Schneeberg notes that after a few proposal passes, they were able to better articulate how the product was innovative, and how they were going to achieve what they proposed, as well as include a detailed competitive analysis of the market.

After climbing the funding learning curve, Kibooco turned back to the B.C. fund and was able to secure $50,000 from the program. Comments Schneeberg, “You learn that they want you to answer the questions they ask.” Kibooco was able to round out funding with a contribution from the NRC-IRAP program and Mitacs.

It was also recently announced that five high-growth tech start-ups in the Kitchener-Waterloo area will receive a combined $4.4 million investment through FedDev’s Investing in Business Innovation program.

Government funding is one of the best ways to finance a development or expansion project, and can provide competitive advantage in both a domestic and international marketplace – but navigating the government funding system requires finesse to set out a tactful and successful approach to positioning your project and leveraging multiple programs.

NorthBridge recently held a webinar on funding for the digital media industry in Canada, and discussed strategies for combining direct and indirect funding models to maximize your financing opportunity. To view the free webinar, send us an email.

On Monday, the Canada Media Fund (CMF) announced a $14 million round of funding to 25 interactive digital media (IDM) projects as part of their Experimental Stream. CMF’s track record in its three years of doling out digital media funding spans 112 projects and $58 million in funding for production support. Production support (as opposed to Development, or Marketing and Promotion support) backs projects coming out of the conceptual phase and heading into the path to market and commercialization.

The Final Closing Dates for CMF’s 2012-2013 Experimental Stream of funding are as follows:
Production: Sept 18, 2012
Development: Oct 2, 2012
Marketing & Promotion: Oct 2, 2012

Funded Projects
A lot of funded IDM products are digital games – here are some other examples of innovative, creative, out-of-the-box projects which really encapsulate the marriage of content and technology that programs like CMF seek to support.

BURGANDY JAZZ – $360,000
An interactive documentary with augmented reality (AR) and geo-localized content that explores Montreal’s role in jazz music history through the legendary musicians of the Little Burgundy neighbourhood. The project includes a short Web doc series, an iPhone app with AR soundscapes embedded in walking tours, a website with geo-localized content, and an interactive eBook.

CosmoCamp – $532,170
Four read along storybooks and four new interactive toys will follow the space faring adventures of Migo and Pandy as they travel from planet  to planet to meet new friends. CosmoCamp is being developed from the ground up with the use of interactive tablet applications specifically designed for toddlers (2-3 years old) and preschoolers (4-5 years old).

iFestivus – $747,869
An online platform for Facebook and iPads that creates a ‘live event experience’ by extending and enhancing the film festival environment through a virtual, mobile theatre with full social media capability. It is an online film festival for the digital generation of filmmakers and fans alike. iFestivus expands the audience by enabling fans to attend virtually with their friends. It enriches the experience by adding bona fide social elements, including access to talent, filmmakers and industry insiders, as well as interaction with other fans not possible in a physical theatre. It allows creators to connect directly with audiences without travel, protects vital industry “windows” via secure, customizable software, and creates trackable communities around individual live events, festivals, films and fans.

Studio in the Sky – $422,625
A web-based community and mobile app that allows musicians of all career levels to record tracks and release them online so the other members of the community may add their tracks, collaboratively creating a finished song.

View the full list of funded projects here.