Startup Cultures Across Canada – London

Creativity is king: gaming companies are big players in London’s tech startup culture thanks to the Ontario Media Development Corporation fund.

Image: By Rjsbird287 (Own work) via Wikimedia Commons

Why Games Took Root in London

London, Ontario, sits about two hours southwest of Toronto, between Toronto and Detroit. It’s home to Western University and Fanshawe College, and for a city of its size, it has an unusually strong history in video games.

Provincial support is one reason. Ontario has long backed its creative industries, including interactive digital media, through grants and tax credits, and that support helped make game development a realistic business in a mid-sized city. Today, Ontario Creates, an agency of the provincial government, describes its mandate as being “a catalyst for economic development, investment and collaboration in Ontario’s creative industries,” including interactive digital media. It runs an Interactive Digital Media Fund, and its site lists the Ontario Interactive Digital Media Tax Credit among the tax incentives it handles.

Lower costs help too. Rents and salaries in London are lower than in Toronto, which stretches the long, expensive development cycle a game requires. And a studio that ships a hit can be based anywhere, because players buy games online, not from a local store.

Digital Extremes and Warframe

London’s best-known game studio shows how far a local company can go. Digital Extremes was founded by James Schmalz in 1993, after the early shareware hit Epic Pinball. It co-created the Unreal series with Epic Games and later found enormous success with Warframe, a free-to-play online action game. The studio says it now has more than 450 staff across Canada and other locations, and describes its London studio as the heart of its creative operations, covering everything from game and graphic design to sound and motion capture.

Its ownership changed along the way. In 2014, Chinese company Leyou bought a majority stake in Digital Extremes, and in December 2020, Tencent completed its acquisition of Leyou in a $1.5 billion deal, which brought Digital Extremes under the Chinese tech giant’s ownership. Digital Extremes remains headquartered in London.

Big Blue Bubble and Mobile Games

London’s second big game company came from mobile. Big Blue Bubble says it has made more than 100 titles, but it’s best known for My Singing Monsters, released in September 2012. The series has since expanded from phones to consoles and beyond: a My Singing Monsters board game more than tripled its Kickstarter goal, raising $100,000.

The studio has also moved back toward bigger platforms. In 2020 it released Foregone, a 2D action game that marked its return to PC and console development after nearly a decade focused on mobile.

In November 2020, Swedish games group EG7 acquired Big Blue Bubble. The following year, COO and co-founder Claudette Critchley became CEO after the retirement of co-founder and former CEO Damir Slogar. Like Digital Extremes, the studio stayed in London after being acquired.

Two foreign takeovers in the same year might look like a city losing its companies. In practice, both studios kept their headquarters in London, so the jobs and expertise stayed in the city while the owners changed.

What It Means for Founders

London’s story is a reminder that a strong niche can matter more than size. Game studios built here have reached global audiences and drawn interest from some of the biggest companies in the industry, including Tencent.

For founders, the lessons are practical. Look closely at provincial programs for interactive digital media before raising outside money, since they can extend a small studio’s runway. Recruit from local colleges and universities, where students are close to an established industry. And plan for the long development cycle that games demand, using London’s lower costs to buy the time a good game needs.

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