Canada’s Games Industry at an Inflection Point: Balancing Global Talent with Local Ownership

Canada has long held its position as one of the world’s

premier video game development hubs. Bolstered by decades of international investment, a deep pool of seasoned developers, and a robust network of regional studios, the nation’s games sector is a cornerstone of the global interactive entertainment landscape. Yet, beneath this surface of creative excellence lies a period of profound structural adjustment. Facing economic uncertainty, shifting market dynamics, and tightening access to capital, industry leaders are asking how Canada can successfully transform its world-class development expertise into enduring, domestically owned global enterprises.

Ahead of the upcoming PGC Summit Montréal on November 10th, industry executives are weighing in on the challenges and opportunities defining the country’s gaming ecosystem. For Ludia CEO Jimmy Gendron, the Canadian games industry is remarkably "resilient, but at an inflection point."

"Foreign-owned companies employ a majority of the workforce," Gendron notes, highlighting a structural paradox at the heart of the nation’s success. "Canada is a world-class place to make games, but still too rarely a place where the companies that own the games are headquartered."

Despite these hurdles, Hyper Hippo Entertainment Chief Business Officer Jennifer Kilback remains optimistic about the foundations underpinning future growth. "There’s still a lot to be optimistic about, with a strong talent pool and government programs that help support innovation and investment," Kilback says. "I see this as a period of evolution, with significant opportunities for studios that combine creativity and innovation with strong business foundations."

Navigating a Changing Industry

Canada’s games sector has not been immune to the macroeconomic pressures impacting developers across the globe. According to a comprehensive economic impact study commissioned by the Entertainment Software Association of Canada (ESAC) and conducted by Nordicity, the number of active games companies in the country declined by 9% between 2001 and 2024, while total employment fell by 3.5%.

More recently, localized contractions have underscored these broader industry shifts. Layoffs have affected major players like Bethesda Game Studios Montréal, while Ubisoft shuttered its Halifax studio in January 2026, impacting 71 positions, followed by the closure of its Winnipeg operations in June 2026, which affected an additional 65 employees. Furthermore, Ubisoft’s decision to sunset Rainbow Six Mobile in January 2027—less than a year after its global launch—demonstrates that even industry giants face steep hurdles when attempting to scale new platforms and business models.

Kilback points to financial sustainability as one of the sector’s most pressing concerns. "Rising development costs, economic uncertainty and tighter access to capital have contributed to layoffs and studio closures across the industry," she observes. "Competition is also intense. With so many games competing for players’ attention, discoverability and the cost of acquiring and retaining players continue to be significant challenges."

Beyond traditional financial pressures, technological evolution is fundamentally altering studio workflows. The increasing integration of artificial intelligence into development pipelines offers exciting efficiencies, but it also sparks complex internal debates. Kilback acknowledges the tremendous potential of these tools to streamline innovation while emphasizing the need for caution. "There’s tremendous potential to improve how we work and innovate, but also important questions around intellectual property, creative integrity and the impact on our people. Finding the right balance will be important as the industry evolves."

Even amid these pressures, international heavyweights continue to double down on Canadian talent. In October 2026, Wizards of the Coast opened a brand-new studio in Montréal, outlining ambitious plans to expand its headcount to approximately 200 employees by 2028. Such investments prove that Canada’s creative workforce remains a powerful draw, even as the market adapts to tighter financial constraints.

The Mobile Opportunity

Historically, Canada’s development ecosystem grew out of console and PC production, largely propelled by early, heavy investments from international publishers like Ubisoft in Montréal and Electronic Arts in Vancouver. Consequently, local educational institutions, incentive programs, and talent pipelines oriented themselves heavily toward big-budget, traditional platforms.

To Gendron, this leaves a notable gap in the domestic landscape, particularly regarding mobile gaming. "It strikes me how few of the teams and studios in Canada are focused on mobile, given where the market is," he says. "Canadians themselves are mobile-first players. Yet our mobile ecosystem is small relative to our console and PC footprint, largely for historical reasons… That is a strength, but it also means the mobile opportunity is underrepresented. The talent we have built in Canada is more than capable of creating global hits in mobile and there is real room to do it."

Canada is certainly not devoid of mobile success stories. Studios like Ludia manage major licensed properties such as Jurassic World: The Game and Jurassic World Alive, while Big Blue Bubble continues to thrive with My Singing Monsters. The broader ecosystem also includes established names like East Side Games Group, Kabam, Hyper Hippo, Gameloft Montréal, and Budge Studios.

However, mobile remains a fiercely competitive arena. East Side Games Group reported revenues of $77.6 million in 2025, down from $83 million in 2024, explicitly citing rising user acquisition costs and fierce market competition. Gendron argues that the competitive set has fundamentally transformed, driven less by new indie titles and more by sophisticated monetization strategies, live operations, and direct-to-consumer pipelines.

"It is not new players; it is deeper monetisation of existing ones, direct-to-consumer channels, and, in mobile especially, publishers from Asia, and China in particular, who now lead entire genres through live ops and user acquisition spend," Gendron explains. To compete, Canadian studios must master publishing, marketing, and long-term community management alongside pure technical development.

Who Owns Canada’s Games?

The question of corporate ownership remains central to the long-term health of the Canadian industry. While foreign-owned studios have built out vital infrastructure and provided stable employment, much of the intellectual property conceived and coded on Canadian soil ultimately belongs to parent companies headquartered abroad.

Kilback argues that shifting this dynamic could allow the country to capture a much larger share of the economic value generated by its workforce. "One of the biggest opportunities is developing and growing Canadian-owned IP," she asserts. "While many of our largest studios are foreign-owned and contribute significantly to the industry, much of the long-term value created here ultimately flows elsewhere. When we own our IP, we keep more of the decisions, the revenue and the long-term upside in Canada."

A notable step toward domestic independence occurred in August 2025, when local shareholders and senior management successfully acquired Montréal-based Ludia, returning the studio to Canadian ownership following its tenure under US-based Jam City. At the time of the acquisition, Ludia employed over 120 people, with plans to add 50 more jobs within a year. Gendron views the move as part of a broader vision to establish a robust, homegrown mobile publisher capable of competing globally.

To foster a dense network of independent powerhouses, Gendron points to international precedents like Türkiye. There, a landmark acquisition—Peak Games—catalyzed an entire generation of founders who subsequently launched dozens of new studios and scaled several into global leaders. "That density of entrepreneurs building and scaling companies is what Canada is missing," Gendron says, drawing similar parallels to the Nordic games industry, where small teams like King, Rovio, and Supercell blossomed into international giants.

Canada has already proven its ability to foster enduring independent successes. Behaviour Interactive and Red Barrels have built loyal, long-term audiences for titles like Dead by Daylight, while independent breakout hits like Balatro demonstrate that even small Canadian teams can achieve massive global recognition. The challenge lies in replicating those conditions on a broader systemic scale.

Investment and International Ambitions

Access to growth capital remains tight as cautious investors demand concrete proof of commercial traction before committing funds. Gendron views this as a universal hurdle rather than a uniquely Canadian problem. "Investment in games is at a low and investors want proof of traction before they commit," he notes. "That said, I would put the responsibility on us as an industry as much as on investors." Studios that pair distinctive, high-quality products with rigorous commercial strategies continue to find backers, much like their counterparts in emerging eastern markets.

Simultaneously, expanding reach beyond traditional Western territories is becoming a strategic imperative. Kilback emphasizes the importance of looking outward to emerging digital economies. "There’s also a big opportunity to reach new audiences internationally, particularly in growing markets like India and established gaming markets like China, Japan and South Korea," she says. "Canada has a strong reputation as a trusted, collaborative partner and that opens doors."

Government Support and the Path Forward

Government incentives have historically been instrumental in shaping Canada’s video game ecosystem. Tax credits and provincial support programs designed to foster innovation and employment helped establish the country as an attractive destination for foreign capital. However, leaders emphasize that these mechanisms must evolve alongside the commercial realities of modern game development.

In Québec, adjustments to the multimedia production tax credit announced in the 2024-25 provincial budget introduced a phased shift toward a greater non-refundable component, altering how some studios calculate their fiscal benefits. For Gendron, the primary goal for future policy should be stability and modernization rather than simply expanding funding pools.

"Not necessarily more, but smarter and more stable," Gendron says. "Stability in fiscal support is the foundation; studios make multi-year decisions and need to know the rules will hold. Modernising the credits matters just as much. Ontario, Manitoba and Nova Scotia already cover marketing and publishing roles, and for a mobile games business, those functions are half the company."

Kilback echoes the vital importance of existing public initiatives, noting how programs have directly impacted Hyper Hippo’s operational trajectory. "Programs like the IDMTC and SR&ED provide valuable non-dilutive capital that allows studios to reinvest in development, innovation and growth," she says. She also credits federal export support—such as funding from PacifiCan and CanExport—with helping Canadian studios establish meaningful footholds in markets like Japan, South Korea, and India.

Furthermore, Kilback highlights the indispensable role played by regional industry associations, including DigiBC, Interactive Ontario, Creative BC, Ontario Creates, and the Canada Media Fund. These organizations provide vital bridges to funding, specialized expertise, and peer networks that help guide developers through every stage of business maturity.

As the Canadian games sector looks toward the coming years, both executives remain steadfast in their long-term optimism. Armed with a deep talent pool, extensive operational experience, and a reputation for creative excellence, the country is well-positioned to weather its current economic adjustments.

"Five years from now, I hope Canada is known not just for the games it builds for others but for the companies it owns, with a handful of Canadian-headquartered publishers of real scale, including in mobile," Gendron reflects.

Kilback shares that forward-looking ambition, emphasizing the ultimate metric of industry health. "Ultimately, success would mean a thriving Canadian games industry that’s not only creating great games, but building lasting businesses and keeping more of that value here in Canada."