Ubisoft's Alain Corre discusses the evolution of the home console business
Ubisoft became the number two publisher in Europe earlier this year, after racking up a number of hits in the past 18 months, from mega-budget blockbusters like Assassin's Creed II to more price-conscious Just Dance titles for the Wii.
As the triple-A market becomes more expensive and risky, and at the same time offering incredible returns for the top five hits, Alain Corre talks GamesIndustry.biz through the publisher's renewed focus on the console market, why he's not looking to long-term growth with Move and Kinect, how 3DS can lift the market in 2011, and why online play shouldn't just be exploited as an additional revenue stream.
Q: What are you impressions of Gamescom this year?
Alain Corre: It is a very busy show and it's amazing to see how many people are around. There are not that many retailers from countries outside of Germany, but the buzz is from all around. So all in all it's very encouraging. In Germany, the feedback from buyers is making us very confident on Move and Kinect. These peripherals are coming and they can boost our market, because it's been down. Every time you introduce new technology you can lift the market. With Move, Kinect and 3DS in six months, it will be a very good and positive time for the industry.
Q: Do you think Move and Kinect can help increase the lifecycle of PlayStation 3 and Xbox 360 in the long term, beyond 12-24 months? Because that's what Microsoft and Sony are hoping, that's there's another five years in this generation of home consoles.
Alain Corre: I don't think so, no. Yes, it's a good extension of the lifecycle for a certain length of time and it's also a good way to capture some consumers they didn't have on the casual side, because Microsoft's 360 and Sony's PlayStation 3 do not have the casual customers. So it will bring in a new category of customer for them.
Now, will it prevent them from releasing brand new technology in the next five years? I don't think so.
Q: This is a crystal ball question, but when would you expect new hardware from the console manufacturers?
Alain Corre: I don't know, usually it's five or six years for every cycle. The Xbox 360 will be on the market for six years, this year. For the moment we have heard nothing, but these guys are always working on hardware somewhere, they are a hardware company after all. Less than five years, to give you another prediction [laughs]. But this will be the longest cycle ever in the last twenty years.
Q: Part of the extension of this lifecycle has been through online services and online play, which have finally been done very well, very defined on consoles.
Alain Corre: It has been another way for the consoles to touch the consumers and link better with customers, and for us it's just another way to play online and another way of buying into games. It's a natural evolution of consoles, but it's not a revolution. More and more we're going down the online sales route for consoles, but it's additional to the business of what we're doing.
Q: How has the rising cost of making triple-A games changed production at Ubisoft?
Alain Corre: The games that are not triple-A are not profitable anymore. And that's changed in the last 18 months. When you have a triple-A blockbuster it costs more money to develop, but at the end of the day there's also the chance of a good return on it because there's a concentration at the top of the charts. To a certain extent it becomes less risky to invest more in a single game or franchise than spreading your investment between three or four games. Because if those three or four games are not at the right quality level, you are sure to lose money. So the business model has changed and we're changing our way of making hardcore games. With hardcore games that we're not sure are reaching the right level, we stop work on them. And that's why we concentrate more on key franchises, because that's what the market wants - something new with huge quality production behind it. The market is not supporting the full range of product that it used to anymore.
Q: With costs so high, will it become essential to monetise console games through online play and downloadable content - in the way that some publishers are hoping to charge for subscriptions for multiplayer gaming?
Alain Corre: It's true that it's important for us to monetise what we create for consoles and online is one way to do it. Assassin's Creed: Brotherhood is an example of where we're going with this in the online segment - we decided this year to add an online game to the franchise and it's pleasing a lot of people. What we're doing is building up for the future. Even though we don't get money for the hours they will spend playing online, the familiarity of our fans with the franchises is growing and when we release the next game more people will hopefully be interested in buying it. A game like that is an investment for the future.
Q: That's an interesting approach. Do you think it's even possible now to introduce new IP at the triple-A level because costs and risks are so high?
Alain Corre: It is more difficult now. To launch a new IP you have to invest much, much more marketing to establish it, and if you add up the huge costs of development plus the investment in marketing you cannot be 100 per cent sure the target audience you'd expect, which is needed for the comeback on the investment. Especially in this part of the cycle of the consoles, we are cautious now to introduce new brands. We'll concentrate on the ones we have and make sure we bring them to the next level in terms of quality. We are still releasing some new franchises, RUSE is one, but it's a niche so we know the size of the market for real-time strategy games. We think with RUSE what we've invested so far we'll be able to find the right consumers and be profitable.
With niche games it's possible to have a hit more than in the triple-A space, especially in the fourth and fifth year of the console cycle. We would expect franchises to be established now.
Q: A niche audience can be very dedicated and loyal...
Alain Corre: If you come with the right proposition and right gameplay with this audience, you can capture their attention and after they will stay with you forever.
Q: So will the next-generation of home consoles be the time again for Ubisoft to invest in new IP?
Alain Corre: I think so. That's always been the case in the past because it's a fresh approach. The new technology always brings new ideas for gameplay or innovation and you can use this to introduce a new IP that will be attached to the hardware. And the market is usually less crowded in the first 18 months of a new machine, so then you can try something new. Right now there are so many huge IPs already known that it's very competitive.
Q: Does Ubisoft still see opportunities in the PSP market?
Alain Corre: We have been happy with our last releases on PSP. Assassin's Creed did very well, Avatar did very well, Prince of Persia is doing good. It's true that the volumes of sales are not huge but still we are making a living on that. We also re-released our key games and franchises on the Essentials range, and that's going good. All in all we are making some good business on the PSP.
Q: Are you eyeing up Nintendo's 3DS for the big hardware success of next year?
Alain Corre: 3DS is something we believe in a lot. We have a lot of games coming for the launch of the machine, at least half a dozen for it, and we've been working on them for a long time. The technology they are bringing to the market is very innovative, very fresh and it can be a monster success because its bringing something new to the market. And then we can develop something new in terms of gameplay. Nintendo is very smart in the handheld market. They surprised us even in the end, even though we had a lot of information and were able to get ahead in the development of our games, they still surprised us each time they bring a new feature that we didn't know about. We're very confident that the machine will lift the handheld market, which is what we need. And we're ready.
Q: Is there any reason to be concerned that the levels of piracy that have plagued the DS might return on the 3DS?
Alain Corre: Nintendo understands that it has lost so much money with piracy on the current DS that it is working on something to prevent that on future hardware. On the DS it was really the very first time that Nintendo software was pirated, so it took us all by surprise very quickly. The new hardware will be less easy to exploit and copy. In the last 24 months the market for DS has collapsed for software but people are still buying the hardware.
Q: One of your big non-core games for later in the year is Michael Jackson: The Experience - is there an opportunity there for you to sell the game through music retailers and cross-promote in the music markets?
Alain Corre: Yes, we are exploring that right now. Soon we will become known as the dance company because with Just Dance 2 the pre-orders are huge, Just Dance and Dance on Broadway are doing very well in the UK and with the Michael Jackson game coming we're going to become specialists [laughs]. Michael Jackson has been the biggest star ever in music and being able to work with his songs has been something we're very proud to be involved in. People were wondering what the game would be and how we would transfer Michael Jackson's music and movement into a videogame, but we're winning them over and the pre-orders are growing very strong.
Alain Corre is Ubisoft's European managing director. Interview by Matt Martin.