One of Norway’s most successful companies, online games maker Funcom, is setting up a new “development studio” in Montreal that’s expected to hire as many as 150 developers within the next 18 months. Employees in Norway are being invited to apply and move to Canada.
Newspaper Dagens Næringsliv (DN) reports that Funcom’s decision to expand in Canada likely comes at the expense of expansion in Norway. “There’s no doubt that we will undergo a considerable amount of our development in countries with lower costs than Norway’s,” Funcom’s chief executive Trond Arne Aas told DN.
Norway’s cabinet minister for cultural affairs, Trond Giske, had been hoping that Norway could attract and keep companies in the computer games business that would expand locally. But Aas indicated the Canadian authorities simply offered a better deal, after courting Funcom for four years. Montreal also is viewed as “one of the world’s most important locations for video game production,” according to Aas.
DN reports that the government of the province of Quebec offers all multimedia companies significant tax breaks on payroll. Wages in Quebec are also lower than they are in Norway, so Funcom’s payroll costs in Montreal can be as much as half what they are in Oslo.
In Norway, Aas added, the state also demands tax up front. “If Funcom invests NOK 100 million to develop a game in Norway, the state has collected NOK 40 million by the time the game comes out,” he told DN. “In Quebec, the authorities think differently.” They don’t levy tax, he said, “before you start making money.”
Funcom, best known recently for its launch of the game “Age of Conan,” also has expanded in Beijing and now has 320 employes in Norway, China, Switzerland and the US. Aas said several of Funcom’s 220 employees in Oslo are considering moving to Canada.
“Our people are relatively young, don’t necessarily have a family, so they often have more flexibility than employees in other companies,” Aas stold DN. “Two to three years in Montreal can be attractive for them.”
It remained unclear exactly which operations will be moved to Canada, although they will include major portions of the development team for Funcom’s next big game project, “The Secret World.” Aas said Funcom would retain some activity in Norway, “because we’re Norwegians and we have solid competence in Norway.”
Government officials weren’t available to comment on Funcom’s expansion in Canada.