Gaming companies are rethinking their future in Quebec, Behaviour Interactive CEO warns

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Language laws and government subsidy cuts have a major Montreal-based video-game company re-evaluating its future in Quebec.

The CEO of Behaviour Interactive said relocating resources elsewhere “hasn’t happened yet. But it could.”

“About 25 per cent of the people in (the Montreal office) come from abroad. French really is their second language. Some of them are worried because it’s their third language,” Rémi Racine said at a gala held by the Chamber of Commerce of Metropolitan Montreal on Tuesday.

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“I’m not talking about students here … I’m talking about people who bring value to Quebec. They bring value to Behaviour, they bring value to the industry,” he said, referring to allophone employees who he says feel uncertain about the future of their careers in Quebec with workplace language laws and the six-month limit on accessing public services in English for immigrants.

Racine said that while the company might undergo some structural changes as the Quebec gaming industry evolves, he intends to keep Behaviour Interactive’s headquarters in Montreal.

Quebec’s decision to cut back on the multimedia tax credit in March has hurt Quebec’s gaming industry, Racine said. Quebec used to offer video-game companies a 37.5 per cent tax credit toward salaries, which will be cut back to 27.5 per cent over the next four years, according to Émilien Roscanu of the Guilde du jeu vidéo du Québec.

“To be as successful as we’ve been, we’ve had tax credits,” Racine said. “Tax credits aren’t popular at the moment. This is all true. But it has created an industry.

“You have to look at the long term. I think it’s a very important industry, with 15,000 paying jobs (across Quebec).”

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Quebec is internationally recognized as a hub for video-game development, ranking among the world’s top five centres for the industry, according to the Guilde du jeu vidéo du Québec’s 2024 report. In 2021, the province’s video-game sector generated nearly $1.4 billion, it said.

Behaviour Interactive developed the horror game Dead by Daylight, which has more than 60 million players worldwide. Founded by Racine in 1992, the company has grown from 325 employees in 2016 to more than 1,200. In recent years, it has expanded nationally and internationally, opening offices in Toronto in 2022, the U.K. and Netherlands in 2023, and acquiring Vancouver’s Red Hook Studios in September.

Racine said the Toronto office receives 10 per cent more government tax credits than the Montreal office and that the salaries in both offices are comparable.

“In the future, we might decide that if an employee in Toronto costs less than an applicant in Montreal, we’ll hire him in Toronto. That’s never happened. Could it happen? It could.”

The gaming industry’s rapid growth over the past five years can be largely attributed to its success during the COVID-19 pandemic. As restaurants, venues and movie theatres shuttered, millions of people turned to video games for entertainment.

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“During the pandemic, there was a lot of money flowing into the gaming industry,” Roscanu said.

But since 2022, the growth has stagnated. Between 2015 and 2023, Quebec’s gaming industry revenue grew 7.8 per cent, according to Behaviour Interactive. The company estimates the industry will grow 2.8 per cent between 2023 and 2026.

The slowdown has been reflected in Behaviour Interactive’s staffing: in January, the company laid off 45 employees. In June, it laid off 95, including 70 from the Montreal office.

“The industry’s unprecedented popularity has also led to unprecedented competition,” the company wrote in a statement in June. “Behaviour will implement multiple strategic changes to its corporate structure, improving the distinction between its product, production, business development and marketing resources.”

Racine has been in charge of Behaviour Interactive for more than 30 years, witnessing the evolution of Quebec’s gaming industry. He said when a new executive producer eventually replaces him, Behaviour Interactive will remain a Montreal-based company.

“I can’t say I’ll still be around in 10 years, 15 years, right?” he said, noting that he is 60 years old. “Someone else has to take over the helm. … But of course it’s going to stay in Montreal.”

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