The animation studio Moving Picture Company (MPC) fixed Sony Digital’s ghastly Sonic the Hedgehog problem, and brought us a fully CGI Detective Pikachu we could fall in love with. Now Technicolor, the France-based corporation that owns MPC, is closing the Vancouver studio right before Christmas, affecting about 80 employees.

They’ll be keeping other studios around the world. The reason they’re closing the Vancouver studio is strictly about money, and specifically about tax incentives. There are so many studios in Vancouver now that the competition for government subsidies is becoming problematic, so Technicolor thinks they can get better margins in other countries, and Vancouver is now too risky to keep open.

“Increasing external market pressures in Vancouver and more attractive opportunities in other locations have created a challenging environment for MPC to sustain the studio,” Technicolor said in a statement. “MPC Film and Technicolor’s VFX brands, including Mill Film, MR. X and Mikros, will continue to grow and expand in Montreal, Paris, Adelaide [Australia], LA and Toronto.”

Visual effects production is always done on razor-thin margins, and when a studio makes even a minor mistake estimating costs on a particular show, it can put one out of business. The risk of that happening is actually pretty high. Rhythm and Hues Studios guessed wrong in 2013, when they invested about $4 million of their own money into the production and agreeing to take their profits from the net profits – profits which never materialized, due in large part to creative accounting that made those profits vanish in a puff of smoke.

All it takes is one bad deal to kill a studio. Technicolor’s move makes fiscal sense, but it’s also yet another big read warning flag on the inherently unstable nature of the visual effects industry. Because the studios grind down the budgets given to FX studios until there’s almost nothing left, the risk of being simply put out of business by a single bad deal is too high to tolerate.

That said, not at least waiting until January so that these poor souls could at least have a Christmas without a sudden, dire economic emergency trashing their lives was frankly a dick move on the part of Technicolor.

There’s no word on what will happen to the former employees of MPC. Their credentials obviously won’t be a problem for finding future work – but the stability of the already impacted CG industry in Vancouver definitely will be.

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