Telefilm Canada will give up to $2 million to video game companies in its new game development contest, the Crown corporation announced at an industry conference in Montreal on Wednesday.

The Great Canadian Video Game Competition will see the federal agency fund jury-selected developers in a bid to help promote and foster growth of the country's home-grown industry.

In addition to the financing, winners who advance through the contest will receive advice from mentors experienced in the video game industry, Telefilm announced at the Montreal International Games Summit.

The competition's funding model will have three rounds, similar to industry financing.

In the first round, to be announced in January, 10 companies will receive up to $50,000 each to explore their concepts.

Round two in March 2007 will see four of those companies move to develop a prototype with up to $250,000 in funds.

The final round will give the winning company up to $500,000 in matching funds to take the game to market.

All participants will receive game production and business development advice from industry veterans, including executives from three of the biggest game developers with operations in Canada, market leader Electronic Arts Inc., French developer Ubisoft Entertainment, and Radical Entertainment Inc. of Vancouver.