Even Quebec’s tax haven for developers is has not been left untouched by the wave of consolidation sweeping the industry in the past year, with independents Humagade and Frima studios to merge.
Supported by a $1m loan guarantee from government agency Invest Quebec and supported by the state’s Minister of Economic Development, Innovation and Export Trade and Minister of Tourism, Raymond Bachand, the move – essentially the acquisition of Humagade by Frima – will create the second-largest independent developer in the region.
Frima Studio, founded in 2003, works on traditional and interactive animated projects, boasts a number of R&D efforts looking at MMO and online developments, and has 90 employees.
Meanwhile Humagade, formed in 2002, has made a name for itself as a developer of mobile and Nintendo DS titles. The firm plans to grow the company by increasing the amount of original IP by developing 3D tools for games on notebooks, mobile phones and Wii consoles and has 45 staff.
Together, they will form a studio of 135 employees – but that number will rise to closer to 300 as the new combined company plans to create 150 jobs over the next three years.
The other major Quebec independent is Montreal-based A2M, which has over 400 employees.
"This transaction will generate significant synergy between the two companies. It will result in the creation of the second-largest independent studio in Québec. It will also bring together a number of large clients. Frima Studio will be able to focus its R&D efforts on diversifying platforms and adding distribution media for products like Harry Potter, Boréal Express, Caillou and Star Wars," Minister Bachand commented.
The government’s $1m support of the deal is part of its SMB Financial program, which supports Strategic Alliances and is "s intended for companies that want to improve their competitive position on the market through an acquisition, consolidation or amalgamation of companies".
"The government continues to take concrete steps to consolidate Québec’s reputation as a global centre of excellence in the development of video games and digital creation," Bachand added.