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Tag: Video Games and Digital Media

Interview: Ray Muzyka, Co-Founder of BioWare

Ray Muzyka is the founder and former CEO of BioWare, and an impact investor.

IBR: You and your co-founder Dr. Greg Zeschuk originally worked as emergency room physicians in Alberta. What motivated you to start BioWare while still practicing medicine?

Before BioWare, Greg and I had actually dabbled in entrepreneurship with medical education software. We made a gastroenterology patient simulator, which ended up being distributed by Janssen-Ortho to all the family doctors across Canada. Even before that, we had also developed an acid-base physiology simulator, which we sold to the University of Alberta — it was used by the first-year med students for a decade. One day at lunch, Greg and I realized that while the potential customers we were speaking to seemed to want medical software, no one seemed to have enough money to pay for it. We liked software, we liked business, but medical education software seemed like a challenging market. So instead, we decided — literally decided over the course of a lunch meeting — to make the leap to take all of our personal savings, max out our lines of credit with our banks to get some startup capital, and hire some folks to start making video games. We both had played a lot of video games; they were our passion growing up. Even after founding BioWare, I continued in rural locum tenens ER and family medicine for the better part of a decade — partly because I liked medicine, and partly because we didn’t take a salary for the first five years at BioWare so I needed the money to pay my mortgage payment for my condo and the minimum payments on my credit cards and lines of credit!

We initially had no business training, but there were some intangible things we learned as MDs that ultimately helped us as entrepreneurs as well. As a doctor, you really learn to understand and value the importance of diverse, multidisciplinary teams. You also have to make sure your communication is clear and respectful to your team members and patients. When working with others, you learn to always trust everyone on your team, but also know that you need to be willing to dive deep and understand the details to ensure that the patient is taken care of.

Something else that always stayed with me is the importance of continuous lifelong learning. This is especially true when you’re focusing on evolving technologies and dynamic market changes. We’re in one of the most transformational periods of human existence right now, so the things you might learn in school are not necessarily always going to be relevant, but the frameworks for learning always will be. You just have to be willing to continually learn.

IBR: How did you manage your time and conflicting goals between your original dream job and your new passion? How did you know that video games would be your next ‘career chapter’?

It never occurred to me that it wouldn’t become my next career chapter. It’s true that both of us had medicine to fall back on if entrepreneurship didn’t work out, but it wasn’t something that I ever thought about. I was likely quite naïve, in that it never really occurred to me that the company could fail! We just did everything to make sure that it didn’t. I was doing the medical locum tenens ER/GP work as a hobby because I loved it, but I just loved BioWare and growing the business and working with my team there more. In a poker analogy, I basically just went all in. When we made Shattered Steel, we maxed out our lines of credit and took all our assets and put it all into BioWare. We didn’t have any external investors (until 15 years later when we had a private equity investor) or family money to invest in the business so it was on us to make sure it succeeded. I suspect that part of the reason I kept working so hard was so I wouldn’t go personally bankrupt!

At the time, publishers were the only way you could get video games distributed, via retail stores. This was prior to the modern era of digital distribution, so you needed a publisher to help you get your products to market. We made a list of what we felt were the top ten publishers in the world at the time and we divided it in half, five each for Greg and me. We then started cold-calling these publishers, but initially, none of them would take our calls. The one we ended up signing with, Interplay, was on my list. I called them at least ten times over the course of a couple of weeks, and finally, the VP Biz Dev I was speaking with there told me to stop calling them. When I asked if they would look at our demo, they finally agreed — if we would stop calling! They then looked at the demo and called us back the next day and suggested we fly down to California that week, and we were off to the races with our first publisher for our first product, Shattered Steel.Through sheer perseverance, we ultimately got nine out of ten of the publishers to place a bid for the product and learned early lessons on the importance of price tension and negotiations.

Persuading experienced people to come work with us in the early days was difficult. By the time of Baldur’s Gate, which was our second game, we had about 60 employees in total. But not a single person on the team had ever made a video game before because we didn’t have the money to hire experienced developers and nobody knew who BioWare was. Why would they come work for us when we’re a bunch of doctors up in Edmonton making video games? That sounds crazy. And it was crazy. At the end of the day, our approach to BioWare was about believing in it deeply and going all in. We were lucky to be able to hire amazing people on our first two teams — smart, passionate, hardworking, and excellent team members, but it wasn’t until after the success of our first big hit, Baldur’s Gate, that we had a brand to attract experienced video game developers to BioWare.

IBR: Although the rewards can be very high, entrepreneurship is also a challenging journey at times. When you were running BioWare, what kind of challenges did you face, and how did you handle them?

The landscape of video games wasn’t as big a challenge for us because we were active consumers of video games ourselves and soon came to know all the developers and publishers. We knew their names, and we were very active in conferences and networking. I soon came to love networking. I was slightly introverted when we started, but I developed more of an extroverted streak. And since then, it’s just grown because I love networking and meeting new people. Over the past decade I’ve come to realize that the angel investing and venture capital landscape is a small, tight community, too, but the people in it, like in videogames, are generally very friendly and welcoming.

One early challenge at BioWare was cash flow. In the early years, cash flow was tight, and we had multiple publishing partners because we had several projects. I’d sometimes need to try to convince our publishing partners to send in payments owed to us a bit earlier than was scheduled. There were a few times where unexpected events occurred and I knew that we could go out of business if we don’t get enough cash to make payroll the following month. Thankfully, I was always successful in persuading them to send it a little bit earlier those times!

Taking my executive MBA at Ivey was quite instrumental for me. The time when I was taking my MBA, from 1999 to 2001, was one of our fastest periods of growth — we were the fastest-growing company in Alberta one of those years, and second fastest a couple of other years before and after. With rapid growth, structures and systems become strained and can break; being able to explore different frameworks and problem-solving perspectives from Ivey to these challenges was exceptionally helpful.

IBR: What advice do you have for students who are considering pursuing entrepreneurship?

You never know if you’ll like being an entrepreneur until you try it! That’s the challenge. If you’re young and curious about entrepreneurship, I’d ask, what have you got to lose in trying it? Recently, there was a paper by Ajay Agrawal, the founder of the Creative Destruction Lab, and Joshua Gans, Chief Data Scientist for the CDL program, about the benefits of mentorship for an entrepreneur. They quantified it in terms of reducing the costs of testing hypotheses, which resonates with me: if you can surround yourself with the right folks who have that critical experience, as an entrepreneur you can de-risk a lot of elements that are otherwise very challenging and risky.

One thing I will note though, similar to our experience at BioWare, is that while helpful, I don’t think you necessarily need prior work experience. As an investor, I personally have a bias towards smart, passionate entrepreneurs who have a creative “spark”. I invest in a lot of science and technology businesses with first-time entrepreneurs. First-time entrepreneurs can do really well if they’re humble and open to feedback, hardworking and thoughtful in their approach, hire the right team and treat the folks they work with well, and bring on the right advisors to help them navigate successfully. For my part, I’m a general medical practitioner, but I co-founded a business that eventually sold for close to C$1 billion. There was a lot of perseverance and hard work over a long time, we were always seeking feedback to help us to improve, and I was incredibly lucky to be able to work with a great team throughout my journey at BioWare and EA.

In retrospect, I can say early signs were probably pointing to me to eventually become an entrepreneur. I chose one of the more stressful medical fields — I practiced rural locum tenens general practice and emergency room medicine, operating in a remote hospital environment, typically as the only doctor on call and sometimes the only doctor in a hundred-mile radius! You could have multiple car crashes, heart attacks, sick kids all arriving near-simultaneously, some in critical condition, and you had to quickly triage and try to figure out what’s going on with them and coordinate a diverse team of nurses, technologists and support personnel. I think you have to have a certain entrepreneurial streak as a doctor to want to do that sort of medical practice.

I like playing poker as well, which is to me a very entrepreneurial type of game. It’s got a lot of parallels with business and being an angel investor — it’s about taking carefully calculated risks and placing the right bets. I try to de-risk my investing by being an active advisor with the teams I invest in, doing a lot of thoughtful diligence, and getting opinions from other folks I respect. Entrepreneurial activities can be high stress and high risk. That’s an important thing to consider if you’re considering becoming an entrepreneur or joining an entrepreneurial team: do you like that level of stress? Is that energizing to you? If it is, then you might want to check out startup entrepreneurship. If it isn’t, that’s okay. Maybe instead of starting a new team, you’ll want to work for an established startup to try it out and learn more about entrepreneurship, or take a more stable, lower-risk role with a team that’s more established, already further on their journey.

IBR: You managed the product development, financial, human resources, operations, marketing and legal business side of BioWare. How did you build your business expertise while starting your own company?

For the first two games, Baldur’s Gate and Shattered Steel my cofounder Greg and I were hands-on, acting as producers, the games’ directors. We built the games with our teams, played them every night to find bugs and provide feedback and ran the business throughout the day. Even though I didn’t have any financial background per se, I learned how to love Excel and make financial models. I was always obsessed with scenario modelling, although I didn’t know it was called that at the time. Cash flow was one of our most important concerns; we were constantly thinking, ‘Well, if that happens then we’re out of money, how do we fill that hole as we grow?’ We played a very hands-on role there, while also acting as the public-facing voices of the company in PR interviews and managing the team and recruiting new talent as we grew.

It was important for us to find mentors, but at that time, there weren’t many technology companies in Alberta, so our choice of local mentors was limited. We modelled our systems and structures on large enterprises like Microsoft or Oracle and other video game developers across the world, and from what we learned in our MBAs, trying to translate from what they were doing to a smaller software business. We leaned too on our professional advisors — our accountants and lawyers. Early on, I learned to run every legal agreement past my lawyers, advice I follow to this day, as I’ve found that the upfront time and cost can prevent much larger downstream challenges and costs. Even though I’ve read thousands of contracts now in my life, I still get everything I sign reviewed by a lawyer, and I find that I can always learn something new in this process.

Early on, we established core values at BioWare that we used to run our business and help us make better decisions aligned with our team, our customers and our shareholders (we didn’t have any external investors for the first fifteen years of BioWare so our shareholders were basically us and all our employees, all of whom had shares or options in the business): quality in our products for our customers, quality in the workplace for our employees, and entrepreneurship for our shareholders. Later, we added two additional values: humility and integrity. Humility is about being honest with yourself and being able to take hard feedback. Integrity is being honest to your core stakeholders like your team, your customers, your business partners, and so on. It was important to always try to live those values to keep our turnover low and maintain a good work-life balance. As our teams grew older, team members had children and developed lives outside the office. They couldn’t spend the same amount of time that they could in the early days. We had to figure out how to balance quality in the workplace with the quality of the products, all while maintaining the entrepreneurial environment. We made sure to talk through problems with our team in the context of those values, all while taking their feedback seriously. The teams working on the products are the first ones to realize when your targets for quality and scope aren’t aligned with the resource and time available, so it’s important to actively listen when they call this out.

IBR: How did you maintain BioWare’s own values and culture after becoming part of a huge organization like EA? Were there ever times when you felt like what made BioWare so great and special were being challenged?

When you get acquired, there’s always a concern that you’ll lose your identity. You have to be thoughtful about it. Thankfully, the CEO of EA — my new boss — was very focused on ensuring that every individual part of EA had their culture and identity. We were a tenth of the size and therefore large enough to actually have a voice in that conversation, but small enough that we were still proverbially sleeping next to an elephant. I tried to be an advocate for what I felt was important. I always tried to have a rational explanation for why we needed to do something if we had to do something a little differently. I didn’t just say, “No, we’ve got to do it this way.” I thought through the business case first, trying to identify, “What’s the advantage to the company of doing it that way? What’s the benefit of culturally ensuring that the integrity is maintained there in terms of return to the parent company?” We were then part of a public company, so we had to return earnings per share to the shareholders.

I made a point to fly down regularly to EA headquarters and to all my studios, typically monthly for most of them, so I was on the road a lot, around 200–250 days a year, for the five years I was at EA. This was exhausting, but I wanted to make sure that I had a presence both in HQ and also within my local studios because that was important from a cultural standpoint. I think “out of sight, out of mind” is something to reflect on; in other words, if you want to have influence with the headquarters and your teams, you have to be seen. Now, of course, it’s somewhat easier now because video communication is sort of the new normal, but back then it wasn’t, though we did use video conferencing a lot earlier than most folks, as my division’s leadership was distributed across North America, with my CFO in Edmonton, CMO in San Francisco, CTO in Austin, COO in Virginia, and GMs running business units of BioWare in five locations. I realized I had to make a point of going down to important budget review and product review meetings to have a voice and more influence in the key conversations.

IBR: What motivated you to pursue your “third career” in social impact investing — mentoring and investing in entrepreneurs in technology, media and medical innovation?

When I was retiring from EA, I gave them six months’ notice. And for the first four months, they were trying to retain me, but eventually, they realized I was set on leaving. At that point, I became “a dead man walking,” so to speak; I still had the same budget authority, signing line item things for million-dollar item allocations and projects, yet I would go to a meeting at HQ and no one would really listen to me on strategy.

So, the result was that for the last couple of months at BioWare/EA, I had some additional free time. I was still very focused on making sure that BioWare was successful and contributing to the parent company, and grooming my chosen successor to step into my role when I left, but around this time I was thinking about what I wanted to do after I retired from BioWare and EA. I discovered the Young Presidents Organization, or YPO, which I’m a member of, had an impact investor talk coming up, organized through their social enterprise chapter. It was in London, England and I only had a day to attend as I had meetings before and after, so I took a red-eye flight out to London and attended this meeting for one day with some of the really big names in impact investing, like Sir Ronald Cohen, who invented the concept of social impact bonds. There was also this investor who runs one of the largest Latin American and Mexican impact funds, Ignia, and many other amazing people focused on supporting social enterprise and impact investing, and although I didn’t yet know much about this space, I found I was truly inspired by it.

I flew back on a red-eye that night, to go back to work, and it came to me. I realized that’s what I’m wanted to do in my third career chapter. Similar to how we decided to form BioWare, that was about all the thought I put behind it! Then, I just started reading to learn more. I created a website at www.thresholdimpact.com, trademarked ThresholdImpact, and started calling investors asking, “How does this work? What’s VC, what’s an angel?” I threw myself into mentorship, starting the University of Alberta’s Venture Mentoring Service as Founding Chair, and I spent a lot of time learning more about angel investing and impact generally. Four years ago I joined the Creative Destruction Lab as a mentor, and it’s been truly transformational for me in expanding my knowledge and network; in addition to my advisory board role, I now mentor a number of teams at the ThresholdImpact UAlberta VMS program and take part in 6 streams of the CDL program, in Toronto, Calgary and Vancouver, mentoring a dozen or so teams at any one time there as well as investing in a number of new teams every few months. I gravitated to focus primarily — about 80% — on health-tech and med-tech because of my medical background, and because I felt that was probably an area of social enterprise and impact in which I could make a difference. I still have a number of general technology investments, too, but more and more my investments tend to be primarily health-tech and med-tech, along with bio-med-tech and some pharma investments. All told I’ve invested in over 60 startups so far, many with follow-on investments too, and I’m continuing to grow the number every year.

IBR: It must take a lot of confidence to just be able to put a big career chapter behind you.

Or naiveté! Maybe it’s the humility of knowing that you can screw it up and being okay with that. Maybe it’s more the willingness to actually take and implement feedback when you are screwing it up and the desire to take on a new challenge, build a new network, just learn something totally new.

As an aside, I believe humility is a very powerful word for entrepreneurs and investors to keep in mind. I remember somebody on my team once said, “Humility as a core value, seems kind of weird, it feels like a weak word.” And I said, “No, it’s actually one of the most powerful words you can have in your vocabulary because it means you have the confidence to actually take feedback and to improve.” When you fall into a pool, you only get wet the first time. After that, you’re wet all the time. So just open yourself up to it and jump in!

That carries over to my investment philosophy. I invest in teams where they want me to be an active volunteer and advisor. Sometimes it’s more formal than that, and they’d want me to join an advisory board or board of directors. But for all of my portfolio teams, I want to be an active value-add investor that’s going to help them when things get tough — this could be helping with networking with other investors or customers, or operational feedback, or just providing advice when they’re having challenges. I’m a generalist, and I sometimes half-joke that I’m just a country GP, not knowing a lot about anything, but a little about a lot of things; I can look at agreements, I can look at financial models, I can provide feedback on marketing plans. I can provide advice around organizational behaviour, structures, systems and processes, which is a particular passion for me, helping teams as they grow and scale. Certainly, if it’s software related, I’m happy to look at the product, UI and UX and give them feedback on that front, too. I’ve been really lucky to work with smart, passionate, hardworking people over my various career chapters!

IBR: Is there a specific type of advice, or specific obstacles, that you frequently encounter or help entrepreneurs with?

I help the entrepreneurs with whom I work with all sorts of different things. These are the same things I worked on when I was CEO at BioWare: scaling, systems and structures, organizational behaviour, HR processes like management and communication and compensation, marketing and sales, product development, and more. As a med-tech and health-tech investor I’m building some general understanding of the challenges of reimbursement, regulatory hurdles in med-tech, clinical trials and things like that, and I’m getting more pattern matching ability on that front as well when I see things over and over.

Also, something that’s become part of my regular activities is networking, business matchmaking. My friend Chen Fong, who’s based in Calgary and Hong Kong and whom I met through the Creative Destruction Lab, is a consummate and amazing business matchmaker in terms of being able to put the right people together, and I’ve tried to model my networking with him as an iconic mentor. Almost every day I find that I am making an intro to somebody in my portfolio teams and often in my network of investors and other folks that I’ve run into through my various travels. This is incredibly satisfying and rewarding; in some cases, they’ve actually formed partnerships and have revenues flowing from one to the other from my matchmaking. In other cases, they’re sharing go-to-market lessons of how they overcame regulatory or IP barriers, or have created commercial partnerships. Maybe they’re developing complementary products, but they’re selling to customers that actually could benefit from both of their services so they can share to grow their customer base.

And that kind of goes back to my experience in my medical practice days where there were the specialists in different subject areas, and generalists that bonded everyone together. It’s vital to have a network of specialists and other generalists that can help de-risk different elements and help make your teams more antifragile, and this is true in business as well as medicine, as it turns out!

IBR: What areas of impact investing are you most excited for or interested in moving forward, especially given those kinds of markets that you said you specialized in?

For health investments, there are some really interesting developments in med-tech and health-tech generally, and COVID-19 has actually accelerated the rate of change, probably by as much as 10 or perhaps even more years, down to the past few months of pandemic! Remote patient monitoring now is actually a real deal. Virtual health care is a major thing. It’s actually a positive for the patient, and it’s a positive for the clinician to be able to have more access to data intervals outside of a clinical visit. It’s also obviously better from a COVID-19 infection risk perspective to not have all the patients coming in, especially those who are at risk with complex morbidities and multiple underlying conditions that make them more susceptible to COVID-19. We live in an interesting time, and one of the most rapid periods of change in human history.

The other big thing I see evolving quickly in health- and med-tech is the increased acquisition of data and increased importance of analytics. When you combine that with personalized medicine, genomics and metabolomics and other aspects of A.I. and machine learning, it’s actually very synergistic; you are able to access data on patients individually and combine that with personalized medical reports to inform drug discovery or therapeutic interventions that are more aligned with that particular patient — it’s really quite magical.

And beyond human health, there are incredible scientific and technologic advances in our understanding of physics, climate change, advances in transportation, engineering, energy creation and storage, space travel — and huge opportunities for investors to have a positive impact in many other categories of impact and social enterprise such as education, climate change and protection of the environment, minority rights and women’s rights, reduction of poverty, agricultural technology to reduce global food instability, and more. This is truly a time of transformational change where there’s great opportunities to make a real difference. There are real challenges in the world that we can and must all work on together to solve. It’s a great time to be alive and continually learning and building networks with others passionate about these causes, and an amazing time to be investing as an angel focused on impact and mentoring social entrepreneurs.

IBR: Given Threshold, your board memberships, and your charitable projects, how do you balance all of these responsibilities and your personal life?

I had a call with a relatively new venture capitalist recently about this, and he was getting overwhelmed. My advice to him was to keep your default answer as “no” until it becomes “yes.” It’s a tricky balance; this doesn’t mean to brush people off. Rather, it means to be principled with whom you do talk to, but to always treat everyone with respect and courtesy. If someone comes to me with a “cold” (non-introduced by a colleague) email and takes the time to explain why they want to speak with me, I’ll always try my best to give them some time. It may not go anywhere, but I treat them respectfully and I try to give them advice and feedback and introduce them to some people who could help them more.

When I was at BioWare I realized how important it was to treat every person I met with respect. It didn’t matter to me what they were doing, what company they were with, or what stage of their career they were at; I always tried to be respectful and gave them time. I still try to do that whenever I can, but I’ve had to create a bit more of a filter because of a lack of time and competing priorities. I try to prioritize my portfolio companies at the top, along with friends and family. Close second are my mentorship commitments from the UAlberta VMS program and the Creative Destruction Lab and my various board work, and still lower priority after those, prospective investment deals that are imminently closing. Everything else is behind these priorities, but I do still try to make time, whenever possible, for networking, meeting new people, helping students and doing talks and connecting generally with new deal flow and impact opportunities. Back in pre-COVID times, my wife and I were also passionate photographers, travelling the world to learn more about social entrepreneurship opportunities in health, environment and education and taking photos of wildlife along the way (I post our photos here, if anyone’s curious to check them out!).

At BioWare, my realization of the benefits of treating everyone with respect dawned on me about ten years after I started going to conferences and giving people my time; I started to see interesting things happen. I didn’t do it for these benefits, but I came to realize that good things happened later on because of the investment in treating others with courtesy and respect. For example, somebody that I helped early on became a major journalist and they recognized that I had helped them earlier in their career; once that sort of thing happens, I had a friend in an important and influential role. In another example, I’d be walking down the hall at BioWare and someone would introduce themselves as a new employee, saying that I had had a call with them back after we met at the Game Developers Conference ten years ago., and telling me that they always wanted to work at BioWare because of that call! To this day, I try to treat everybody I meet with respect and give them time, to the extent that time permits. The benefits are often indirect and take a while to manifest, but they are real and valuable.

Some of my best memories from my Ivey MBA are the case studies that I was able to take back to BioWare, oftentimes the day after I got back from the class. One amazing professor, Al Mikalachki, who retired the year after my MBA, stood out in particular. His class was truly transformational for my understanding of organizational behaviour. And he taught it all out of his head! I came up to him once after class and said “This is amazing. Is there a book I can go to, to learn more?” He responded, “No, it’s just me speaking from everything I’ve taught for the last 40 or 50 years.” There are a lot of amazing things that I learned in that class and many others at Ivey, frameworks that I still apply today on a daily basis with my portfolio and mentorship teams.

IBR: If you could go back and give yourself advice as a university student or eMBA student, what would you tell yourself?

Stay focused on your core values. They’re the most important thing — living them, truly living them every day and staying open to feedback is very important. And, treat the people you work with and interact with, with respect; build your network, build your relationships every chance you get and treat people respectfully because if you don’t, it’ll come back to bite you. If you do treat others respectfully and with consideration, it’ll be rewarding — and you can’t predict how it’ll reward you. But it will, and you’ll have friends as a result for life that you can turn to. Ultimately, that’s what Greg and I did and what our teams did at BioWare.

And if you fail but you learn from it, it’s not really a failure. That’s also where mentors come into play. They can help prevent you from running off a cliff and give you the feedback to make sure you’re asking yourself the right questions. Surround yourself with people who can give you feedback and ask the right questions of you, and listen to their advice.

IBR: When starting BioWare, you mentioned that you never conceived that the idea could fail; evidently, you had a really strong goal in your mind. What does “success” mean to you?

I have a bias against investing in teams that create a business with the sole purpose of exit. Instead, I prefer to take more of a Taoist approach: not to seek an outcome, but rather to strive. This was my philosophy at BioWare; I tried not to seek specific outcomes but tried to strive in a positive direction. If you aim for the moon, sometimes you get the stars! If you’re building value every day, good things will happen over time, which will accrue to your customers, your investors and your employees. Those things will lead to virtuous cycles over time. Look for the opportunities, de-risk the challenges and always try to move forward in the right direction. For me, success is having an amazing and passionate team around me, and I was lucky in all my career chapters to work with incredible teams.

I’m still figuring out what I’m going to do when I grow up. I think part of success is always enjoying every step along the journey. One time at BioWare, I was in a panic because Baldur’s Gate was a massive hit and it was the second game we had released. I turned to my wife Leona De Boer and said, “What If this is the best thing we ever did?” That was frightening to me because I didn’t want it to be the last and only “best” thing we did. For me, success is continually building on the things you’ve done and always trying to make them better. It also means doing it for the right reasons aligned with core values: you want to make a good workplace for your team, you want to create the best products for customers and you want to create good outcomes for your investors and shareholders. If you do this, you’ll be building something incredibly valuable and enduring.

I have a philosophy that teams that create better outcomes for the world — social enterprises — actually have a greater propensity for better financial outcomes. This is because they are creating things that people love, value and want. Public companies have the challenge of quarterly earning pressure, which sometimes creates more short-term thinking. I personally really enjoy the long-term view of private businesses, including thinking about how you take your past failures, successes and make learnings out of them in the future. That’s a long-term view. If you are always striving and not seeking, you can’t be disappointed by missing a target; if you’re always open to feedback, you can’t be hurt by constructive feedback, and you can use it to learn, and grow, and continually improve.

A Look at the Rise of Edmonton’s Gaming Industry

Illustration by Scott Carmichael

From BioWare to Improbable, Edmonton’s gaming industry has seen a lot of growth over the last decade.

When BioWare started making computer games in 1995, Greg Zeschuk was a newly practising doctor. He and his co-founders, Ray Muzyka and Augustine Yip, were on a shoestring budget, so, when it came to finding space to work, the trio took the most pragmatic approach — they set up shop in a cramped room in the basement of Zeschuk’s home.

“The ceilings were so low, Ray would hit his head on a regular basis,” laughs Zeschuk. “But we had space, and we had power, so we made it work.”

It was in that basement they started developing what would become their first game, Shattered Steel, which was created jointly with the Calgary-based Pyrotek Studios and released in 1996.

By that point, BioWare needed more room, so the company moved into the second floor of a building off 109th Street and 88th Avenue, out of which cycling company Redbike now operates on the ground level.

“It’s been renovated since, but at the time it was really run-down,” says Zeschuk, who now runs Blind Enthusiasm Brewing Company and Biera, both of which can be found in Ritchie Market, which he also owns. “There were only four plugs in the wall, so the power would go out all the time. There were about 20 of us at the time, and we all had to turn on our computers in a specific sequence to avoid blowing the circuit breaker for the whole building.”

After six months of frustration, BioWare moved to a location on Whyte Avenue for a few years, eventually landing in a building on Calgary Trail and 45th Avenue, where it remained for over 15 years. Over that time, it released some of the most successful games of all time, such as 1998’s Baldur’s Gate, a smash hit which was credited with saving the role-playing game genre, which later included BioWare games like Star Wars: Knights of the Old Republic and, more recently, the Mass Effect and Dragon Age franchises.

Never did Zeschuk, who retired from the gaming industry at the end of 2012, think that the company he started out of his basement would one day occupy three stories in a downtown skyscraper.

Last fall, BioWare moved into a custom-built 75,000-square-foot space in the EPCOR Tower. Aside from the ability to comfortably house its existing 300 employees, the space will allow the company to continue to expand in the coming years.

Its amenities are abundant: In addition to the traditional features, the new office boasts audio recording rooms, an arcade, quiet rooms for employees to take breaks, and a motion-capture studio.

Gaming giant Electronic Arts purchased BioWare in 2007 in a whopping $860 million US deal, but BioWare has continued to operate in Edmonton since being acquired by the California-based superdeveloper, maintaining its roots in the community and its identity.

Although Zeschuk left BioWare almost eight years ago, he’s glad that the company has chosen to reinvest in Edmonton, and downtown in particular.

“I know someone who works at BioWare who decided with his wife to sell their house in Summerside and move downtown,” he says. “There’s a lifestyle factor involved that I think appeals to a lot of the employees who work at the company, and I think it will help them lure talent from elsewhere. It makes the prospect of moving to Edmonton a lot more attractive, especially to young professionals.”

But BioWare isn’t the only gaming company that has recently moved into a new office in town.

England-based technology startup Improbable opened a branch in Edmonton in the fall of 2018, led by Top 40 Under 40 alumnus Aaryn Flynn, former general manager at BioWare who worked at the company for 17 years. Over a third of Improbable Canada’s 70-plus staff is made up of former BioWare employees, and its office in the historic Metals Building is just a few blocks away from BioWare’s new space.

Improbable is known for its SpatialOS, a cloud platform for online games. It allows developers to leverage the cloud to help make their games run faster, look better and feel more realistic. Improbable’s Edmonton team is hard at work on a currently untitled role-playing game that utilizes the SpatialOS platform.

It was the creation of the Interactive Digital Media Tax Credit by the provincial government in 2018 — which offered a 25 per cent refundable tax credit for labour costs — that helped convince Improbable to open an office in Edmonton.

“The door really swung open for investment when the tax credit was brought in,” explains Flynn, who is now general manager, North America, at Improbable. “At the time I was looking to start my own studio here in Edmonton, and Improbable got really excited about the prospect of creating their own games. I was really impressed with their technology, so we were able to come together and start a team here.”

According to Flynn, there are a number of factors that make Edmonton a desirable location for game developers to plant their flags — like the post-secondary institutions that provide new grads, and the city’s multicultural scene. As of 2019, Edmonton was tied with Winnipeg for fourth place among Canadian cities for the most video game companies, following much larger scenes in Toronto, Montreal and Vancouver, according to Entertainment Software Association of Canada (ESAC).

There are currently 55 companies involved in the gaming industry in Alberta.

“There’s a lot of talent in this city, both technical and creative,” he says. “And there are also favourable economics, like a reasonable cost of living compared to a city like Vancouver or Toronto. Not to mention Edmonton’s revitalized downtown, where a lot of the people who have joined our company from out of town have settled.”

The growth of Edmonton’s gaming industry over the last decade is part of a larger national trend. According to a Nordicity analysis of the Canadian video game industry from 2017, more than 40,000 people were employed on a full-time basis in the video game industry in 2017, up 11 per cent from 2015. In 2017, the video game industry contributed more than $2 billion to Canada’s GDP, as reported by Nordicity.

To help incubate this growth, Alberta’s NDP introduced the digital media tax credit in 2018, but, after just a year, the UCP ended the program, much to the outspoken frustration of companies in the industry.

With the removal of the tax credit, there are fears the Alberta scene might stagnate compared to other provinces, like British Columbia and Ontario, where tax credits and other incentives still exist.

“It was super disappointing to see the tax credit discontinued,” says Flynn. “When you look at the level playing field it made for our business and many other businesses in Edmonton, it made a lot of sense. I think its removal means that we’re less likely to be on any game development or any other creative endeavour’s radar for growth. The business case for growth has become that much more difficult when you can receive great support in other provinces.

“But we’ve got a great blueprint here, we’re happy with the team we’ve assembled, and we’re excited about what we’re building. We’re just one part of a community that together is building a new culture in Edmonton. It’s satisfying that other people are starting to see what I’ve seen in Edmonton for the past 30 years.”

Beamdog: a business with ‘unimaginable’ potential for global reach

Trent Oster, chief executive officer and co-founder of Beamdog. (Photo by: Emily Rendell-Watson) 

The growth of the global video game industry continues to outpace many traditional industries. The ability to develop local talent and draw people in from around the world has helped spark the development and growth of a number of gaming companies in the Edmonton metro region.

“Video gaming is a truly diverse industry,” says Trent Oster, chief executive officer and co-founder of Beamdog, one of the largest game studios in Alberta. “We are a strong exporter, and we’re diversified — 95 plus percent of our sales are outside of Canada,” he says, explaining that they’ve sold games to people in all but two countries.  

The Edmonton-based company of close to 60 people is known for remastering popular role-playing games like Baldur’s Gate and Planescape: Torment for desktop and tablets. 

Planescape: Torment

“The gameplay itself, the length, the hard coded rules … is the same. Everything around that is changed: how it plays sound, how it sets up the video screen, how it displays graphics, how it does everything,” Oster says. 

And it’s paid off — Baldur’s Gate is so popular that it has been translated into 19 languages.  

Baldur’s Gate

“We actually did a Turkish version by working with people in Turkey out of the fan community. They helped us translate it and get the game represented there,” Oster says. 

Beamdog is currently actively developing its own original game and there are about half a dozen other potential concepts the team is working through. 

According to GamesIndustry.biz, the global games market was valued at close to $150 billion by the end of 2019 and is poised for continued growth. Oster worries about how the provincial government’s move to remove the Interactive Digital Media Tax Credit and the Alberta Investor Tax Credit will affect game studios in Alberta, but thinks the industry as a whole is still poised for continued success. 

“It’s currently one of the largest forms of entertainment on the planet … the potential for growth is unimaginable. It’s going to be feeding so many other industries going forward,” says Oster. 

‘A gateway’

Oster views working in game development as “a gateway” to the augmented reality and artificial intelligence industries. Especially in artificial intelligence, the Edmonton metro region has a significant competitive advantage. The University of Alberta ranks among the top five institutions in the world for AI research, is a national leader in high performance computing, and the Alberta Machine Intelligence Institute (Amii) is helping turn that expertise into practical industry applications – including in the gaming industry. 

“If you look at fields that require a lot of concentration on high performance computing, performant code, user interface and user attraction optimization — video games is right in the mix,” says Oster. 

He explains that the skills his team has in visualizing and interacting with large datasets will be invaluable for the next generation of AR and AI companies. 

“You put augmented reality plus artificial intelligence together and we’re going to be able to do amazing things with computers,” Oster says. 

“I can’t imagine an industry that won’t be impacted by it.” 

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