Interactive entertainment leader Digital Extremes finds success in Ontario

From a highly educated talent pool to excellent incentive programs, the province offers the ideal climate for world-class digital media companies

London, Ontario-based video game innovators at Digital Extremes proudly rank as one of the world’s top development studios in the interactive entertainment industry today.

They’ve shown leadership in their field for more than three decades, beginning in the early 1990s with the shareware hit Epic Pinball. That led them to co-create the Epic Games Unreal series, along with the wildly popular Warframe. The upcoming sequel Soulframe, was just announced by the company in July at the 7th annual TennoCon.

Digital Extremes is a part of Ontario, Canada’s thriving digital media industry, which brings in $1.65 billion annually.

The company has had great success with the Games-as-a-Service (GaaS) model, which offers free basic game access with new experiences as in-game purchases or subscriptions.

Digital Extremes has gained attention as a leader in the digital media world, receiving numerous awards for its innovative games and progressive studio culture.

So, what’s been the secret to success for Digital Extremes?

Ontario’s amazing talent pool

Topping the list—not surprisingly—is talent. “We’re fortunate to be here in London, [Ontario], where, thanks to the province’s top-notch universities and colleges, we have access to an exceptional talent pool of artists, designers, animators and gameplay programmers,” says Digital Extremes president, Mike Schmalz.

As a part of a robust tech ecosystem in the province, Digital Extremes benefits from Ontario’s tech talent pipeline, with our 44 colleges and universities producing 63,500 new STEM graduates each year.

Interestingly, when COVID-19 began impacting Ontario in March 2020 and Digital Extremes’ staff had to work from home, the studio kept up with productivity. “I won’t say it wasn’t a challenge,” says Schmalz. “Making games is a highly collaborative endeavour. But we empower our team members and provide them with good collaborative tools, support and services.”

In the past two years, Digital Extremes has hired more than 100 new team members who have been incorporated seamlessly.

Government focused on growing Ontario’s interactive digital media sector

Also critical to the company’s success has been strong government support, and Schmalz is frank about it. “Like all game developers, we’ve had our ups and down over the 29 years we’ve been in business, and we wouldn’t be here today if it weren’t for Ontario’s Interactive Digital Media Tax Credit.”

The Digital Media Tax Credit was created in 1998 to support the development of the province’s fledgling interactive media sector. It’s considered one of the most generous of any jurisdiction, providing up to a 40% tax refund on the costs of labour and some of the marketing and distribution for games created in Ontario.

“The decision to establish that tax credit program has been critical to the growth of the industry in Ontario,” says Schmalz. “You can see the results in our growing and increasingly diverse ecosystem.”

The province also provides exceptional research and development incentives that reduce the cost of $100 of R&D to between $64 and $32.

So, where is Digital Extremes headed from here?

“We’re very excited about what the future holds,” says Schmalz. “Warframe is continuing on a strong path. And we recently announced Soulframe, our first new, internally developed IP in almost a decade, which is into a multi-year development cycle of technology and community building.”

And then, there’s the company’s collaboration with Airship, which propels it into the publishing and co-development end of the business.

“It just made sense to us to take some of the money we’ve earned and invest it in other companies. We’ve opted for a non-traditional publishing model where a company like Airship, which produces great games, will have the freedom to do what it does well without us interfering. We add value where we can—in this case, with back-end and marketing support—and let them get on with it.”

Sounds like a winning formula for a company at a turning point.

Learn more about Ontario’s booming Interactive digital media (IDM) industry.

Discover more about Ontario-made video games on The Lodgge, a third-party website showcasing Ontario’s interactive entertainment development sector.