Preview: GameON Finance 2011

Q: GameON: Finance has been going for a few years now - where did the original idea come from?

Ian Kelso: We set up the event in 2008. The genesis kind of came from the explosion of the Wii into the market place, and seeing that there was a deficit of titles in a number of categories. At the same time some of the digital distribution platforms were starting to take off, and while the traditional model for publishing and financing games served the hardcore quite well - it was very well modulated for a specific set of demographics and types of titles - but there seemed to be this burgeoning, new and alternative need for content which the existing publishers really weren't set up to serve. Kids, senior citizens and women, for example.

So it seemed to us that there was an emergence of a fairly strong need for sources of capital for the games industry, and we started looking at what some of those sources might be. Would they be down a traditional equity route, would they be angel investors? In the film industry, several different models have been tried over the years to encourage investment in the early stages, and in Canada we've had different types of tax incentive programmes to try to get the private sector to invest in entertainment product.

And then there were a lot of government levers - whether they be tax credits, or subsidy programmes, especially in the early stages to underwrite the risk for young start-up companies.

One of the problems for developers, if you can call it that, with the tax credit system is that you don't get the money at the front end; you get it after you commercialise the product, so there's also a gap financing problem that companies face - how they cashflow and make the game knowing they'll collect a cheque after it's published. How do they actually pay the employees all the way there.

So there were all these different types of financing problems, and there really wasn't a venue that directly attacked that issue - which is always kind of odd, because in the traditional technology space there's always a lot of forums for discussion about financial mechanisms, looking at best practices and methodologies for piecing together the financial structures for a project; or for underwriting and funding your company.

We saw it was something that wasn't being done, and that we had some expertise in - drawing from the film, TV and tech industries - and decided to have a one-day forum to talk about what might be the future of financing for the games industry.

That was January 2008, and we followed up with a second forum in the Fall that year, and again in 2009. This time around we're back to the beginning of the year, partly due to our own internal event calendar, and partly to find the best space in among some of the other international events.

Q: So who are the people in the room?

Ian Kelso: There'll be developers, across different game platforms and distribution methodologies - the console games companies, and digital distribution platforms. There's been a real explosion here, as with everywhere, of development for the portable platforms - the smartphones, iOS, Android and so on. And of course the social media space as well.

Q: I wonder how much, in terms of new attendees, social network games will account for this year?

Ian Kelso: I know there are a few developing companies here, and one that's still in stealth mode - they're doing some very mature games on Facebook. There's a company that's already gotten angel funding - it's not as big here as, say, the iOS platform scene... there are five new iOS developers popping up every day... But I've been surprised by the maturity of some of the things I've seen for Facebook.

I don't think it's a platform that's been fully explored or exploited yet. There have been a few developers in the early stages of the cycle that have remarked "Oh, that's not a real game or distribution platform..."

Q: The keynotes were announced yesterday - take us through the line-up.

Ian Kelso: Well, people really value our case studies, where you get to really peek under the hood and see how a game was made - what the financial mechanisms were, how it was pulled together. We'll have Dino Patti from Playdead Games talking about a fairly independent game in Limbo, and their ability to raise quite significant private financing for it.

And on the other end of the spectrum for Canada, a company like Behaviour, which really started as an animation company run by an ISP - but had a very long arc into development. Now that BioWare is owned by EA, I think Behaviour is Canada's largest independent developer, and Remi Racine is the president there. He'll give that perspective of the growth and scaling of a company, from a very small group of people that were playing in a few different industries, to really pulling it all together.

We'll also be looking at transmedia strategies for the first time, and we've got John Carmody - who's Canada's biggest producer of films. He specialises in service production, so he does a lot of international - especially Hollywood - production here in Toronto, but he's been involved in a couple of game franchises, most notably Silent Hill and Resident Evil.

Q: Obviously networking is pretty important for these kinds of events - how many people are you expecting along?

Ian Kelso: Last year we were at about 180 people, so probably somewhere a little over 200 this year, based on how things are tracking right now. The event started with under 100 in the first year, so it's bumped up by 20-30 per cent each year.

We're starting to get a little bit more international each year, both in terms of speakers, but also delegates as the reputation of the event starts to rise, and we've had excellent feedback each year.

It's pretty unique to have such a tight focus on the business of the industry, and looking at the financial structures - having that venue for people to be able to come and share information for a couple of days is important.

There's a list of things you need to grow your studio. One is great talent, one is access to capital.