* Canadian video game studio to open later this year

* Ontario gov’t to invest C$262 million in Ubisoft

TORONTO, July 6 (Reuters) - French videogame maker Ubisoft Entertainment SA UBIP.PA is set to open a Toronto studio that will create 800 jobs over 10 years, the Ontario government said on Monday.

The Canadian province said in a statement it will invest C$263 million ($227 million) over 10 years in the company. It added that Ubisoft will invest over half a billion in the video game studio, expected to open later this year.

Ontario, Canada’s manufacturing heartland, has been losing jobs in the midst of the nagging global economic downturn.

The announcement comes just one month after data showed Canada’s unemployment rate hit an 11-year high in May as the recession resulted in big layoffs. The unemployment rate in Toronto was 9.3 percent in May. ($1=$1.16 Canadian) (Reporting by Frank Pingue; Editing by Jeffrey Hodgson)