A look at Canada's video game industry

The video game industry is one of the main pillars of the digital economy in Canada. An industry that, by creating employment, advancing innovation, and applying creativity, plays a role on a global scale. Video games in 2024, with a 3 percent increase relative to 2021, have contributed 5.1 billion dollars to Canada's gross domestic product (GDP). In recent years, video game revenue in Canada has been greater than that of television, magazines and books, recreational venues, and the performing arts, and has had a 1.2 billion dollar indirect impact on this country's economy.

According to the economic reports of the Nordicity group commissioned by the Entertainment Software Association of Canada (ESAC) in 2024, the number of studios in this country has declined 9% from 2021 to today, most of this decline being in small studios with 2 to 4 employees. Although Canada's game-development studios have faced significant challenges after the COVID pandemic, in the remainder of this note we examine why the video game industry in this country has reached maturity and how investments have been effective in Canada's growth and success.

Canada's video game industry from yesterday to today

Canada's video game industry took shape at the beginning of 1980 with the founding of studios in the cities of Vancouver, Toronto, Montreal, and Edmonton. The turning point in the history of Canada's game-development industry occurred in 1991, when Electronic Arts (EA) acquired Distinctive Software and turned it into EA Canada. This studio became EA's oldest active studio and experienced striking growth. The number of EA Canada employees went from 80 people in 1992 to 660 people in 2000 and to about 1,300 people in 2021.

In 2021, this industry succeeded in earning 3.4 billion dollars in Canada, which experienced 20 percent growth relative to 2019. The development of the video game industry in this country has increasingly become one of the important economic drivers. Also, the game-development industry in Canada has witnessed striking growth in the number of companies. The number of these companies from 2019 to 2021 increased by something around 35 percent and as a result became a thriving sector of the economy. In 2021, the revenue of Canada's game-development companies reached about 4.3 billion dollars, which was 20 percent more than in 2019.

The most successful Canadian game-development studios in the world

Canada's game-development industry is known for successful studios such as Electronic Arts (EA) Canada, Ubisoft Montreal (Ubisoft Montreal), and Behaviour Interactive (Behaviour Interactive). Electronic Arts Canada, which is part of the parent company Electronic Arts, in 2023 had 7.4 billion dollars in net income and has offices in various Canadian cities including Toronto and Montreal. Ubisoft Montreal, which is known for producing games such as Assassin's Creed, in 2025 reached 2.2 billion dollars in annual revenue. Behaviour Interactive, too, with the successful game Dead by Daylight, which in the first two months of its first year of release sold more than 1 million copies and attracted more than 50 million players, has obtained a special place on the list of the most successful and, with 275 employees, is one of the active and influential studios in this industry.

The share of video games in the flourishing of Canada's economy

Canadian game-development companies in 2021 made a notable contribution to the country's economy and, with 4.3 billion dollars in revenue, recorded 20 percent growth relative to 2019. In this same period, this industry's global revenue reached more than 176 billion dollars, which experienced a 21 percent increase. Canada's share of this global market also reached 3.4 billion dollars in 2021, which shows 20 percent growth relative to 2019.

In 2024, the video game industry played a more prominent role in Canada's economy and, with a 3 percent increase relative to 2021, added a figure equivalent to 5.1 billion dollars to this country's gross domestic product. Of this amount, 3.9 billion dollars was supplied directly by this industry and another 1.2 billion dollars took shape through indirect effects. This is while in 2021 this industry's share of Canada's economy was 5.5 billion dollars, which relative to 2019 showed 23 percent growth.

The video game industry in Canada and the human-resources challenge

The increase in Canada's revenues in the video-game domain has not always been without challenge. With rising overhead costs such as providing human resources and marketing, this country in 2021, in the game-development sector, spent something around 3.7 billion dollars, which was a 17 percent increase relative to the previous year. 68 percent of these costs, equivalent to 2.5 billion dollars, was spent on labor wages and salaries. The economic growth of the video game industry has also led to an increase in wages. The average annual salary of employees in the video game domain in Canada, with a 21 percent increase, has reached 102,000 dollars in 2024, which has had an upward path compared with previous years. While the share of labor costs in total costs has remained almost constant and still accounts for 68 percent of this industry's total costs.

Despite changes in the labor market, this industry is still considered one of the largest entertainment domains in Canada and accounts for more than 34,000 jobs in this country. Although employment in this sector has declined by about 3.5 percent since 2021, the percentage of full-time employees has increased from 81 percent to 86 percent. While employment figures in Canada's video game industry last year faced a 3.5 percent decline, a positive shift is observed in the full-time workforce segment. The share of full-time employees has increased from 81 percent to 86 percent. These changes have usually been due to factors such as company consolidation, studio closures, and widespread layoffs, which have affected the employment trend in this sector.

The impact of video games on Canada's consumer market

The statistics report the deep and dual impact of video games on the culture and social relations of Canadians. Video games, as one of the main components of contemporary Canadian culture, have had extensive effects on the everyday life of this country's people. On average, 81% of Canadians are engaged in video games; this figure among men aged 18 to 34 reaches 96% and among young women in this same age group reaches 80%. However, there are also concerns about the negative effects of this entertainment. About 89% of Canadians believe that video games can be addictive, and more than half (56%) believe that these games have a negative effect on young people's behavior. In addition, problems are also observed in online interactions. One-third (34%) of players have been insulted while playing online, and this figure among male users aged 18 to 24 reaches 71%.

The distribution of game-development companies in Canada by geographic location

Most game-development companies in Canada are based in the three key provinces of Ontario (Ontario), Quebec (Québec), and British Columbia (British Columbia). The province of Ontario has the largest number of studios in this industry, while Quebec, as the main hub of human resources in this sector, dominates Canada's video game market. The combination of these two provinces accounts for 80 percent of Canada's game-development companies. Meanwhile, the Atlantic region, with striking growth, has recorded a 139 percent increase in the number of small companies since 2019, equivalent to 18 new companies. Also, Quebec, with 24 percent growth in the number of its small companies, has added 29 new companies to this industry.

Canada's game-development industry in the post-COVID era

After the COVID-19 pandemic, something around 59% of game-development companies in Canada faced a decline in productivity, especially large companies, which were the most affected. In this same connection, only one in every ten large companies had planned to return to a full-time in-office work model. And this was while the hybrid work model, which includes presence in the office together with remote work, has become a new standard in the post-COVID world. On the other hand, the reduced presence of employees in offices has forced some companies to change their workspace. About 25% of these companies intend to make their office space smaller or change it in a way that facilitates collaboration and holding group meetings.

Final word

In 2023, forecasts indicated that video game market revenue in Canada would reach 5.77 billion dollars and by 2029 increase to 10.91 billion dollars. These forecasts are not far-fetched; given that Canada's video game industry currently includes about 32,300 employees in 937 companies, this country can be introduced as one of the leading producers of video games. The video game industry in Canada has become an important factor in this country's economy, which, with the direct support of the public sector and key development centers, is passing through successful days. Also, with the advance of technologies such as virtual reality, augmented reality, and artificial intelligence, the video game industry in Canada can offer newer and more attractive experiences for players; this causes emerging markets to be created around the world to attract more users.