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In-Depth: Montreal Game Biz Sees Salary-Fixing Collusion?
In-Depth: Montreal Game Biz Sees Salary-Fixing Collusion? Exclusive
November 18, 2008 | By Leigh Alexander

November 18, 2008 | By Leigh Alexander
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    17 comments
More: Console/PC, Exclusive



Industry sources often claim that certain kinds of "truces" between game studios are fairly commonplace.

For example, competitors might occasionally agree not to hire one another’s talent for the duration of a given project, to help each other retain staff when all hands are needed on deck.

But a correspondence obtained by Gamasutra suggests that some Montreal-based companies may be attempting to collude on salary caps, under the auspices of benefiting the economics of the industry in a given region – and at the expense of competitive wages for development staff.

According to a scan of an internal email that we translated from French, human resources director Flavie Tremblay -- when employed by Eidos in June 2007 -- reached out to fellow Montreal publisher Ubisoft to propose just such a collaboration.

"As you know, there are more and more important players in the Montreal industry, and the well of our resources is limited," wrote Tremblay, herself a former Ubisoft employee, to Francis Baillet, as she welcomed him to the role of human resources vice president at Ubisoft.

"I sincerely believe that a collaboration would eventually allow us to better provide for our needs in forming a workforce, and avoid a bid for higher wages which would only benefit the employee, and which would end up harming the industry in the long term," Tremblay’s message continued.

"I know that all of us face the challenge of employee retention, but I sincerely believe that salary augmentation does not represent a long term solution. Let me know if you are interested in an eventual discussion. I believe that [Montreal-based] A2M will probably be interested; then, we’d only have EA left to convince."

Electronic Arts did, in fact, verify that it received a correspondence from competitors in Montreal similar to the one obtained by Gamasutra. But the company declined to provide any further details, neither to show us the correspondence nor to confirm the company or individual that sent it.

When approached by Gamasutra for comment on this story, EA Montreal vice president and general manager Alain Tascan called the letters "troubling."

"Colluding with competitors to restrict salaries in Montreal appears unethical and definitely contradicts EA’s core values," Tascan said. "EA is currently reviewing records to affirm our understanding that no representatives from our company participated in the meetings referenced in these letters, and that no one from EA colluded with competitors to restrict employee salaries."

Notably, Tremblay’s correspondence was written prior to the public launch of Eidos’ Montreal studio. According to claims from Gamasutra sources, Tremblay composed and sent the email in question on her own initiative and without the support of executives at Eidos. The company allegedly dismissed Tremblay some months after she sent the email.

However, there is no confirmation of how or whether Ubisoft or A2M responded to Tremblay's invitation, the status of any discussions or whether any such agreement was put into place.

Following her dismissal from Eidos, Tremblay has since returned to Ubisoft, and according to public information, is currently Ubisoft’s human resources manager.

Tremblay’s original memo -- independently verified by Gamasutra as being legitimate -- was also recently leaked onto the web, and the timing of the leak appears significant – it is, after all, over a year old.

According to Eidos Montreal’s official website, the studio held an open house to attract new talent on November 15 – the same time frame that Tremblay’s memo (which lists her as an Eidos employee) first surfaced and roused suspicions, making it possible the leak is another tactic in the region's recruitment wars.

Today also marks the kickoff of the Montreal International Games Summit, which aims to bring public and media attention to the games industry in Quebec and address the interests of its workers.

"Since EA opened a Montreal studio in 2003, we have fought a legal battle for an open employment policy that allows natural market forces to determine where people work and how much they are compensated," EA Montreal’s Tascain said.

"These letters are especially troubling given the generous support that the Quebec Government and taxpayers have provided to help these companies create jobs in the region."

Gamasutra attempted to contact all parties involved for further comment on this story. Ubisoft declined to comment or address questions on this matter, calling the issue "rumor and speculation," and Gamasutra was not able to reach either A2M or Eidos Montreal to obtain an official comment as of press time.


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Comments


Joe Cleary
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Funny that Ubisoft declined to comment. Let's see if they're singing a different tune soon. Great, great work, Leigh.

James Hoysa
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It's sad to see something like this happening in a location where the industry is so rapidly growing.

David Saunders
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Wow Leigh, stellar work!

Alan Youngblood
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This is an interesting story. Being somewhat of an outsider, I wasn't aware that this sort of thing was common, although I have been fearing the practices of large business in our industry since sometime last year.



This whole "Be afraid of the economy, now do what I say because 'we have to for financial reasons'" crap has to go. I'm not sure there's a lot that can be done to repeal the bailout/rip-off in the States, but it's sad to see that the same cut-throat business tactics are being used in Canada and elsewhere around the globe. These sleazy business tactics are what got our world into the economic problem, and things won't get better until we quit allowing this to happen.



A while back I wanted to "break in to the industry." Now I'm not so sure I want to work with any company out there (maybe two exceptions). I am starting up a company with several others in the Raleigh area and I'm glad that I at least have that. We treat our employees with high levels of respect. I advise that any other company out there does the same.



You will self-destruct if you do not change your ways. I say this because I value our industry as a whole and the competition, it's how the free market (should) work.

Michael Gehri
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This is a nasty form of price fixing.



I never understand when you have an employ that is excelled in the company, they stick to the standard fixed percentage pay increase. When they can just get hired at a new job with a 10/15% increase because of the skills they have picked up at our studio. It takes money and time to train up new people, why not pay people what they are worth!? We had one guy leave, they had to hire 3 people to replace him. They should have given him what he was worth...



The head of another game studio said this to us: You guys train them, then we hire them." Now that is brutal, (but true).

Nikolaj Leischner
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Salary-fixing is outright stupid in the long term because it makes talented people choose different careers who might otherwise be available to the game industry.

Maurício Gomes
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In fact, altough I am a employer, I must agree with the idea, competition to pay higher and higher salaries are what drive costs upward wildly, make games cost 60USD on the box, and results in stupid workers having high salaries.



Of course, some people deserve a bizarrely high pay, because they are good and rock, but escalating salaries is bad on the long term to the industry as a whole (even employees, that might find themselves out of jobs when companies close)



Now, EA talking about ethics is funny ¬¬

michael franchina
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salary capping is fine, as long as you dont mind hiring the dregs of the workforce.



This will merely drive away talent. Which will result in bad games, which will result in less money for the studio. You want the best, you have to compensate them, look at Pixar or Valve, you think they pay little? And hope people will work there out of the goodness of their heart? not a chance. And they produce the best. Its not a mystery how good products are created.



oh and the economic problems were caused by government regulation and currency inflation, not sleazy business practices.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

David Tarris
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It sounds like people who even partially agree with this practice don't understand basic supply-demand principles. Putting a wage at a level artificially lower than its equilibrium value will only cause a shortage in qualified people to take those positions, and the companies that do it will be the ones to lose out. There's no way that "competition to pay higher and higher salaries" could possibly cause costs to skyrocket, because once testers start demanding $100,000 salaries, how hard do you think it would be to find a reasonably qualified individual out there who would say "I'll do it for $40G"?



It all comes back to "what's it worth to you?" If a $60 game isn't worth $60 to you, then don't buy it. If an employee isn't worth a six-figure salary, then don't hire him at that much. There's nothing nefarious about it, it's just the invisible hand the guides prices towards the most beneficial to all parties, and it's only when you start imposing immutable prices that things go south.

Dennis Crow
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Professionals cost money, who'd of thunk it?

Yannick Boucher
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Erm... has anyone thought of the fact that this might not have been a question of keeping salaries down, but simply a move on Ubi's part to make sure nobody was defecting "en masse" over to Eidos ? All I know is Ubi Montreal has been hit with quite a few HR-related scandals over the years: the lawsuit with EA, the departure of Martin Tremblay, the former general manager, which led to another lawsuit... and there's more dark shit on the fiscal side...



What,s it gonna take to ask for a little clean-up ??

Mariusz Szlanta
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Hello there,



Good point Yannick. Yes, this is just another HR problem appearing in Montreal and it does look that Ubisoft treats the city as its powerbase and is very reluctant into allowing other companies to tap on Montreal's resources.



But I would rather prefer to follow some bigger aspect of it. Seems like the area attracted some of the best talent of the world and now wonders why these people want to be paid so much money ;).



Salary capping and any secret agreements are the best way to force these people out of Montreal.



On the other hand maybe the companies do feel they pay too much and they need to lose some stars to revive the balance on the market? People expect great things in Montreal, because this is Montreal - place advertised as paradise for game development. A few scars on the crystal can lower their salary expectations at least.



Anyway, this is a personal disaster of Flavie Tremblay as she will be remembered as the person who initiated this kind of

solutions. Not very helpful in future career.



Greetings.

Rob Britton
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Wow!

I'm a young coder here in Montreal and was warned about going into the gaming industry. I guess here is even more evidence supporting those people's arguments!

Yannick Boucher
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Mariusz, I totally agree. But sometimes greed is a really bad thing. Quality/price, Montreal is pretty darn hard to beat. And when you have salaries that are subsidized almost 1/3 by the government, you get tax breaks, and you still pull off moves like this, it's dubious, to say the least. Salaries in Montreal are NOWHERE near what they are in California, yet you don't hear people complaining over there !



It all depends on your business strategy, I guess. Ubisoft has always relied strongly on studios in developing countries, therefore they're probably comparing Montreal salaries to the ones in Romania or China, whereas EA or Eidos, while they do have operations in China and elsewhere, they don't rely as heavily on them, so they're probably comparing to SF or the UK, and feeling they're getting a great deal...



As for Flavie Tremblay... well, we'll see if it's really her own personal move. I mean, she did leave Ubisoft, and was then re-hired, how often does that happen ? If Ubi has done no wrong, they should come clean.

Mariusz Szlanta
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Hello Yannick,



Interesting. I haven't thought about Ubisoft taking defensive stance due to corporate policy. If there is really a difference in salaries offered (as the whole packages with all the bonuses and perks) between Ubi and other companies, then Ubi Montreal should lose people in favour of other Montreal-based companies while hiring aggresively outside Quebec to cover the losses.



F. Tremblay was re-hired by Ubi as you observed. It means they have no problem with her suggestions. Even if there was just a stupid mistake and she's good and clean then bad impression still remains. She will have to prove this is only a bad impression, not a truth, which may turn into a bit tiresome experience. I may guess she is quite popular in Montreal now.



Greetings,



Marius

Carlos Mijares
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Good job on the article!


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