Ubisoft CEO ponders the future after Quebec cuts tax breaks for game studios

[SaP]

Ubisoft Montreal is one of the company's biggest studios, with more than 2,600 employees. But it was built primarily on the strength of Quebec's generous subsidies and tax breaks, and with a newly-elected government facing serious debt problems, those breaks are being cut back. That has CEO Yannis Mallat taking another look at the studio's long-term future.

"I think we need to analyze what this means for us," Ubisoft CEO Yannis Mallat told IGN. "Then once the analysis is done, we'll be able to decide what the next stage is for us."

The cuts were confirmed in detail earlier this week by Develop, which noted that tax credits on salaries that currently go as high as 37.5 percent will be reduced to 30 percent for games produced in French and 24 percent for those produced in other languages. As revealed in a 2005 press release, Ubisoft enjoyed the maximum reimbursable tax credit, and it also received multiple millions of dollars in support from various government agencies.

Ubisoft announced in September 2013 a plan to create 500 new jobs by 2020, a decision reached primarily thanks to the promise of more government money, including a $9.9 million investment in the expansion and even more tax incentives. But that government was voted out of power in April of this year, and its promise of support went with it, and while Mallat said Ubisoft is still aiming for growth in the province, it's not the "primary goal."

"I think what Quebec has become over the years in terms of videogame development, it’s not a hotbed," Mallat said. "So obviously this tax program was here to help build that environment. So we see this program as an important reason for the growth of the sector in Quebec."

But is it a priority at all? "Not a hotbed" is an interesting choice of words, but the tax breaks are being reduced, not eliminated, and Montreal remains a major development hub. Mallat may not be happy, but I suspect that Ubisoft won't be going anywhere.