A 23-person development studio in Charlottetown, Prince Edward Island, Canada is to be offered an incentives package to prevent the office from closing down and moving to neighbouring Nova Scotia.
The Longtail Studios office, which develops titles for the casual platforms including the Apple iPhone and Nintendo Wii, appears to have been poached by Nova Scotia, much to the annoyance of the PEI local government.
"I am concerned with the possible loss of these positions on PEI," said Innovation Minister Allan Campbell told CBC News. "I've asked staff in my department to put together a package that is attractive to the company and that incites them to remain here on PEI.
"Why Nova Scotia in particular has targeted this particular company, I'm not sure about that," he added.
According to reports, the company's tax credit agreement is set to expire in November, while it also apparently receives subsidies on wages and office space costs.
The tax incentives on offer in Canadian provinces have been long-discussed in other parts of the world as the country's global videogames ranking has risen steadily in the past few years to sit third - above the UK, but behind the US and Japan.
Certain US states as well as other countries, including Singapore and France, have also instituted tax incentives for videogame developers, while the UK government first admitted the possibility of culture-based subsidies in the recent Digital Britain report.