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| Last updated at 8:40 AM on 10/09/08 |
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California-based video-game developer Other Ocean Group Inc. with St. John's natives Deirdre and Andrew Ayre at the helm, will be setting up an office in St. John's later this year creating 62 skilled jobs, thanks in part to some $2.4 million in government funding to the company over five years. Deirdre Ayre (left) studio head for the Charlottetown, P.E.I. operation and Andrew Ayre, owner and CEO of Other Ocean Group, look on as Maggie Evans tries out the game "Castlevania: Symphony of The Night," following Tuesday's formal announcement at The Rooms.- Photo by Joe Gibbons/The Telegram |
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Game on for video-game developer 
Provincial investment will total up to $2.4M
ROB ANTLE
The Telegram
A California-based video-game developer with ex-pat Newfoundlanders at the console will open a St. John's office within months.
Other Ocean Group Inc. plans to create 62 skilled jobs in the province.
The Newfoundland and Labrador government will ante up as much as $2.4 million to the company over five years to secure the investment.
"We're tremendously pleased to be partnered with the province to help establish and grow the video-game industry here in Newfoundland and Labrador," Andrew Ayre, owner and CEO of Other Ocean Group, said Tuesday.
"As Newfoundlanders, we know the determination and drive of the people ... we are delighted to be bringing our industry experience home to create well-paying, long-term jobs."
Andrew Ayre has been in the industry since 1992, when he started his own business with friends in Berkeley, Calif.
In 2006, Ayre - then co-president of Foundation 9 Entertainment, touted as North America's largest independent video-game developer - recruited his sister, Deirdre Ayre, to spearhead expansion efforts into Atlantic Canada.
The company considered Newfoundland at the time, but Prince Edward Island offered a ready-made incentive package for the industry, and existing infrastructure in the form of a tech centre.
Foundation 9 set up shop in Charlottetown in 2006, aided by $500,000 in ACOA funding and P.E.I. government tax incentives.
In 2007, Foundation 9 spun off its P.E.I. studio, calling the new company Other Ocean. Andrew Ayre became owner and CEO, while Deirdre Ayre was named studio head for the Charlottetown operation. The company remains based in California.
Other Ocean currently employs about 50 people in P.E.I. between its studio and video game-testing affiliate, Sculpin QA.
The company plans to hire video-game artists, designers, producers, programmers and managers at its St. John's studio.
Business Minister Paul Oram said the government's persistence finally paid off in reaching the deal.
"I think it was the fact that our team have been very adamant about wanting them to come here, very aggressive and just kept the pressure on," Oram said. "And of course I think they made a good offer."
There are two financial elements to the agreement.
The government will give Other Ocean a forgivable loan of nearly $950,000, which will be written off if the company meets its job targets.
The other $1.47 million in possible funding comes in the form of non-repayable grants - roughly half tied to wages, and the remainder going towards start-up and initial operating costs like recruitment, training, marketing and rent.
All told, the government's overall $2.4 million investment works out to roughly $39,000 per job over five years, or about $7,800 per job per year.
The benefits are weighted more heavily in the first two years of the deal.
Employee salaries are expected to average $75,000 annually, Oram said.
The St. John's studio will focus on design work, art work, production and coding of games, for platforms like the Xbox 360, Apple iPhone, Nintendo DS and Wii.
"Our business model, we focus on things that are developed in shorter cycles, six to 18 months," Deirdre Ayre noted.
She acknowledged that recruiting could be a challenge, but said the company is ready for it.
"There's a whole world of people out there who are interested in being in places like Newfoundland and Labrador and Prince Edward Island, because it offers a different lifestyle, a safer lifestyle, a place where they can actually afford to own a home. We have some challenges, but we've met those challenges in finding people."
Other Ocean recently won two Xbox LIVE Awards from Microsoft for its game "Castlevania: Symphony of The Night," published by Konami.
Among its other titles are "Super Monkey Ball" for the Apple iPhone, which the company says sold over 300,000 copies in the first 20 days following its release.
Currently in the works is a Newfoundland-inspired game called "Puffins: Island Adventure," set in the Witless Bay Ecological Reserve and featuring music by Great Big Sea's Alan Doyle.
rantle@thetelegram.com
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10/09/08
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SANDY from NL writes: Why does such a successfull company need funding to setup in NL ? These companies are always telling governments to stay out of their business; except of course to give cash!
Will this company pay corporate income tax to NL or will it be to the USA, the home base location?
How much of the company's money is being invested in the NL operation?
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| Posted 10/09/2008 at 9:51 AM | Alert an Editor | Link to comment |
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Eugene from Town, Newfoundland writes: Here, here Sandy, my point exactly.
What sticks in my craw is that this dynamic company with nothing but growth on the horizon comes to an area of high unemployment where the downward pressure on wages would afford them competitive advantages, yet they still need government handouts!?!?!
Sounds like another Griffiths Guitar works...they're still on the line to the province for millions but are now owned by Gibson and have paid back nada. The Ayres are a known commodity here, very established family with deep connections...has this helped in securing this funding?
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| Posted 10/09/2008 at 10:16 AM | Alert an Editor | Link to comment |
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Eugene from Town, Newfoundland writes: Sandy,
Here's the link to the government press release...outside of meeting employment targets, which would determine whether any money has to be repaid, there doesn't seem to be any stipulation regarding any private capital investment...sounds shady to me!!
http://www.releases.gov.nl.ca/releases/2008/business/0909n03.htm
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| Posted 10/09/2008 at 10:20 AM | Alert an Editor | Link to comment |
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Lory Adams from St. John's, NL writes: Of all industries exigently needed in NL, the government chooses crass funding in the video-games industry? These job-opening my friends, will be more likely reserved for industry specialists from nationals other than those of NL.
The people don't need your video games nor is the majority skilled enough to be employed, go back to the US!
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| Posted 10/09/2008 at 10:25 AM | Alert an Editor | Link to comment |
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Tracy from St. John's, Newfoundland writes: I personally think this is awesome. Well-paying, long-term jobs!!! It will show just how skilled our majority is and bring even more attention to Newfoundland and Labrador.. We should have more joint ventures of this kind..
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| Posted 10/09/2008 at 10:47 AM | Alert an Editor | Link to comment |
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Eugene from Town, Newfoundland writes: Tracy,
Maybe if you enjoy joint ventures you should invest your own private capital. Joint ventures imply that the government is invested in a company with the expectation of a definable share of profits when the enterprise goes into the black. This is a hand-out to a private enterprise with no return on investment (eg. dividends) and no onus on the company to invest any money in our province. But if you are interested in joint ventures I've got a plan for a green house that could supply all of Newfoundland's cucumber needs perpetually.
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| Posted 10/09/2008 at 11:07 AM | Alert an Editor | Link to comment |
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Doug from NL writes: For some reason, the government is always taken in by any company that claims to be high-tech, leading edge etc. I worked for an engineering company that survived for about 10 years solely on government handouts and never produced anything except fat payouts for the owners at the end. Corporate welfare at its best.
I suspect that this company will follow what many others have done - roll in here to take advantage of various government programs and then high-tail out of town when the hand-outs dry up.
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| Posted 10/09/2008 at 11:11 AM | Alert an Editor | Link to comment |
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BWJ from NL writes: Here we go again, have we got a deal for the people of NL. just invest a couple of million dollars or so and we will help solve your unemployment/low wage problem. Well Mr. Sprung--oops Ayre. As stated if your business is so viable and making piles of technological dollars, why do us taxpayers have to back you.
If it's to good to be true it usually is. Another white elephant????
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| Posted 10/09/2008 at 11:14 AM | Alert an Editor | Link to comment |
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Phoebe Tilley from NL writes: How can Danny Williams sleep at night? He can come up with millions for this while at the same time cutting basic funding for nursing homes and telling staff to cut money from the food budgets.Staff shortages result in residents going without a simple daily bath all as a result of funding cuts. Yet Ross Wiseman says all is just great and under control. Then again Ross loves his job so he wont say anything that Danny dosent tell him to say.
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| Posted 10/09/2008 at 11:32 AM | Alert an Editor | Link to comment |
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Chad from NL writes: I think that it's awesome to see a video game developer come to the province, but I do agree if the company is that successful and NL wages are so much lower than why do they need government funding.
Secondly, as an avid gamer, I think this company will be a complete flop. (What) is 'Puffins: Island Adventure' supposed to be. 'Castlevania: SOTN' was a acclaimed highly rated title why not continue in that direction. Puffins sounds like a crappy kids game or even worse a useless tourism promo. If you ask anyone who has any knowledge of the industry they will tell you there are really only two profit models for games: casual games like Wii Sports, Wii Fit, and Rock Band or hardcore games like Call of Duty 4, GTA IV, and Halo. Companies that produce lots of small crappy games get labelled as shovelware companies by industry insiders and eventually lose funding and respect.
Other Ocean Inc. = FAIL
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| Posted 10/09/2008 at 11:36 AM | Alert an Editor | Link to comment |
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Paddy from Ireland writes: Companies get money from governments to startup and create jobs. If the NL government didn't do it then some other government (like PEI - or Ireland) would.
The NL government needs to diversify. Currently all of its eggs are in the oil basket. What other industries are there in NL? Call centres? Auntie Crae's?
Half the 1.5 million is tied to wages - the government will get that money back from taxes alone.
My advice to this company - hire the best and brightest - and make it a success.
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| Posted 10/09/2008 at 12:42 PM | Alert an Editor | Link to comment |
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Sandman from NL writes: your article states this company opened up a studio in PEI in 2006 with $500,000 from ACOA and tax incentives from the government of PEI and created 50 jobs.
The NL government is giving $1.9 million to create just 12 more jobs...REALLY ! Also, what tax incentives the the NL Government grant to this company? How much did or will ACOA invest in this company, or is this another cost of the ABC campaign?
Deirdre Ayre stated that the work of this company could be done anywhere. Why not outside the overpass?
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| Posted 10/09/2008 at 1:02 PM | Alert an Editor | Link to comment |
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Proud Newfoundlander from NL writes: First off...I have never been more embarrassed to be a Newfoundlander. Does anyone bother to research facts before they just blurt out whatever comes to mind? I don't think they do.
Folks seem to be dead set against the idea of Other Ocean opening a studio in the city....why?
The province has an admittedly stale industry...anyone will tell you that more and more Newfoundlanders are being forced to leave the province to find work and education, if you ask me (as someone said) diversity is sorely needed here!!...and whoever said that Newfoundlanders don't have the skillset to work in such an industry couldn't be more wrong. Anyone in the Computer Science Program, Business or Arts program is fully capable, as well as anyone with animation backgrounds, or a large array of other skillsets...the company will need more than just a narrow focus of skills to run. Artists, Programmers, Animation, Design, Production, Administration, Human Resources, Accounting ect ect...all are open and viable jobs. Please don't insult us and say we aren't capable....or at least less capable than the US .
Also, if people understood how business works they would likely be less angry about the handout . Other Ocean is not begging for cash...they are quite successful in PEI, I mean Super Monkeyball is the best selling phone game of all time, and they have numerous awards for XBLA...so they know what they are doing...why would they want to come here? Simple...because the Newfoundland government wants to try to jumpstart a stale economy...so they give Other Ocean money for start up to draw them here which will cover wages mostly as well as rental space ect and the Government will see most of that back in taxes alone and then some....so....how is that a bad deal for Newfoundland?? They will have to pay provincial tax...not bypass it and send money to some magical place outside the province. It's how business works, and in return the Government see's jobs and tax return.
As far as jobs go...it's hardly 12 jobs...it's 62. The PEI studio is NOT closing down, nor are they moving the whole thing here, it's remaining open...watch the newscast read and listen! Which means 62 opportunities will be available here...and not just for out of province people either...if you think you have the background or skills to work, then apply. Nothings stopping anyone from doing that.
I won't even comment on folks bad mouthing what the Puffins game means for a relatively unknown province...promoting the island, music and heritage is never bad...if you don't like it, the ferry is that way -
In anycase, I think it's great that two Newfoundlanders are trying to better this place and make us more than an oil spot on the map or a stop over for tourists on the way to Europe, how about showing a little support and welcoming Newfoundlanders home instead of acting like children who can't have candy.
I for one hope Other Ocean does great here, and show's that Newfoundland is more than what people think and that it's a viable home for any venture, maybe even MUN might expand it's programs like UPEI did to encompass a Game Design and Development course and create even more jobs and opportunities for students as well!
Welcome home guys! Hope your here to stay.
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| Posted 10/09/2008 at 7:02 PM | Alert an Editor | Link to comment |
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c t from Paradise, NL writes: Why is it that we as Newfoundlanders are always so negative about these ideas. Yes some of these have failed in the past but if this company creates 60 plus jobs averaging $75,000 a year isn't that a good thing? How can we grow an industry like this without taking some risks?
For those who keep asking why this money is not put into healthcare etc, there are many things in government that money is wasted on that offer absolutely no return to taxpayers. At least in this case the company will actually create some much needed jobs with good salaries.
This company has become a big success in PEI because of the governments investment. Think of the other spin offs a successful company like this could create.
By the way this company just sold 300,000 copies of a game for the IPhone @ 9.99 a pop!!
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| Posted 10/09/2008 at 9:44 PM | Alert an Editor | Link to comment |
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Richard Pardy from Nassau, Bahamas writes: The world is a very competitive place and these developers could be sitting is seats in Mumbai, Shannon, Jamaica, Tel Aviv or Berkley. All have advantages over Newfoundland, either : (1) lower labour costs; (2) better trained labour pool; (3) synergies with a more vibrant high-tech community; (4) more attractive tax system; (5) better weather; or (6) all of the above. There are two reasons they are coming to Newfoundland – the money and the founders have Newfoundland roots. Is this a good investment for Newfoundland? No one really knows. The video game industry is bigger than Hollywood’s entertainment industry, we have a company with an impressive track record, they will be hiring a bunch of young Newfoundlanders who would normally go elsewhere to secure these types of jobs; and it could be the start of a new industry. Probably not a bad roll of the dice.
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| Posted 11/09/2008 at 9:58 AM | Alert an Editor | Link to comment |
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