What Makes the Gaming Industry So Hot Today

The gaming industry is becoming one of the most important segments in Canada’s thriving tech sector. Gaming employs 16,000 people and contributes $2.3 billion to Canada’s GDP annually—and both figures are rising fast. “The business of games includes everyone from very small gaming companies with one or two people working out of a basement, to very large companies like Ubisoft,” explains Christa Dickenson, executive director of Interactive Ontario on this week’s BusinessCast podcast. “It’s an industry to watch.”

Dickenson—a former film and television executive who is currently busy organizing Interactive Ontario’s GameON: Finance 2014 conference, which takes place November 20 and 21 in Toronto—believes the gaming sector is at the cutting edge of the Canadian economy. And she shared a few of the reasons why.

1. Agility

Like many creative industries—including television, film and music—the gaming sector relies heavily on contract and/or freelance employees. Why? “Because a gaming company’s end results are project-based,” Dickenson explains. “They’re based on creativity, and run by creative directors who usually want to bring in specific people to do the work.”

That not only means the right people are working on the right jobs, it also gives developers the agility to scale up and down as the market demands. That’s particularly useful for the many small developers across the country, she says. “A smaller company has to be so much more agile,” she explains. “Once they are able to land some financing for a project they’ll bring in six contractors.”

2. Innovative pricing

Game developers have been at the forefront of the “freemium” movement, offering their programs to users for no initial cost, with the end goal of generating revenue through ancillary add-ons or other creative markups. In Dickenson’s view, smart developers are learning to navigate this tricky pricing model. “Whether someone will pay depends on their buying patterns. It depends on their DNA as a user, a shopper and a player,” she explains. “But it’s important for developers to remember the user is smart.” Savvy developers have learned that it’s very difficult to “trick” end-users into paying for something.

3. Growing applicability

Gaming developers aren’t just appealing to the needs of couch potatoes craving distraction. They’re making a big difference in some surprising places, including health care. Dickenson cites the example of a hospital in Toronto, which has partnered with a developer to create a video game that helps children with cancer manage their pain. This is just one instance of many in which “gamification” is permeating the mainstream—and developers stand to play a crucial role.