E3 2014 Ubisoft logo

The city of Montreal in Quebec is a hotbed of game development, but a recent cut in tax credits could change all that.

In his June 4 budget, Finance Minister Carlos Leitão announced a cut in tax credits to the industry by 20 percent.

The tax cut will apply to all game studios in the area, but of course the big boys like Ubisoft and Warner Bros. have the clout to cut deals that will spare them.

Smaller studios are disadvantaged by this in a couple ways.  They aren't exactly rolling in cash, and a change like this might force them to move to another region just to stay solvent while they work on their next project. Martin Carrier, VP of WB Games Montreal and head of the video game lobby group Alliance Numérique, lists places like England, Louisiana, and Ontario as some of the locales development could move to.

The other disadvantage is that a big company like Ubisoft will have additional funds to offer more appealing salaries. In an interview translated by Polygon, Eidos Montreal expressed this concern.

"I do not know how Ubisoft and Warner will react, but it is clear they could take the opportunity to offer more competitive salaries," said Eidos Montreal's CEO David Anfossi.

With so much industry in the city, it's easy to see why the government might want to squeeze a bit more money out of it, but it won't matter if they push the industry out instead.