P.E.I. needs to be more careful about how it recruits video game developers, says the Island's Interactive Media Alliance.

'I think they really just were offered a better deal in Nova Scotia, and off they went.' — Mark Sandiford, Interactive Media Alliance

President Mark Sandiford was reacting to the news that Longtail Studios had moved its operation off the Island to Nova Scotia. The move came after the provincial government made a significant cut in wage subsidies to video game developers.

"The province really should not be dangling carrots in front of them and saying 'here, come for the money,'" said Sandiford.

"At some point, if you decide to reduce the money, then those companies will go to somebody else who's dangling a carrot."

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Longtail is moving its games to the mainland. ((Longtail Studios))

Under the provincial subsidy, video game companies used to get 50 per cent of their wage costs covered, at least for a year. Recently that offer dropped to between 25 and 30 per cent for five years. Sandiford said that's when the foreign-owned Longtail decided to move after only two years on P.E.I.

"They didn't really have very deep roots here," said Sandiford.

"I think they really just were offered a better deal in Nova Scotia, and off they went."

Sandiford doesn't think other video game developers will make the same move. He believes the new subsidies are enough to keep local companies growing.

There are still new companies coming as well, such as Snow Day Games, which received a 50 per cent wage deal under a federal subsidy program. Founder Matthew White said if he were offered P.E.I.'s new subsidy the company may have ended up somewhere else.

"That certainly would have soured the deal a little bit," said White.

The 50 per cent deal is only good for six months. White said the company will have to make substantial revenue by quickly selling its new game for the iPhone, or their tenure on P.E.I. may not last long either.