This year Ubisoft celebrates 25 years as a publisher in the video games business - nothing to be sniffed at when you consider the turbulent changes the business is constantly faced with. It's done that by building multiple evergreen intellectual properties, writing smart licensing deals and backing the risky creation of new intellectual property, resulting in either massive hits (Assassin's Creed, Rabbids) or fumbled misses (Haze, RUSE). But what's important is it allows its creative teams a certain amount of freedom not afforded at other publishing companies and backs them with high-level marketing until the game is in the consumer's hands.
So when new formats come along, you can expect Ubisoft to jump in with both boots. Having seen considerable success on Nintendo's Wii and DS when other publisher's were struggling and complaining about a lack of third-party support, Ubisoft has announced a bundle of upcoming Wii U titles, including new IP. And on top that, the firm is also going headfirst into TV and movie production, maximising assets already created for video games. We caught up with the shy and quiet CEO Yves Guillemot at E3 earlier this month, to hear more....
Q: Nintendo has revealed the Wii U, and I know Ubisoft has been closely involved with that hardware - what's you initial reaction to a new console like that and Nintendo's approach to the living room?
Yves Guillemot: I think that from the beginning when we saw that console we were impressed by the level of quality of the experience you could get. In fact, being able to have the pads plus touch is really something that can enhance your interaction with the game. And the fact that it's a screen as well and it can receive information, send information, to your friends and family and so on, to make it easy for social activity, is something that I like a lot as well.
Q: So you're happy to be getting in there quickly and first with Nintendo on this, and be there day one when the console comes out with some Ubisoft games?
Yves Guillemot: Yes, and certainly we will announce one game that we want to launch day one that is a new type of game, which should be interesting. It's a first-person shooter game.
Q: I think it's interesting that you still see that first mover advantage as important in the console space.
Yves Guillemot: It is still very important, just because you can test a market and also see through the eyes of the first consumers. They are the people that actually have the word of mouth factor. The trendsetters.
The TV business is interesting because everything is pre-sold before you start creating the project, so it's not that risky
Q: Nintendo has been kind of vague on the specs of the machine at this stage, but how would you say that Ubisoft games are going to compare to games that are already out there? Is it going to be on a similar level in terms of visual quality and other aspects, as your Xbox 360 and PlayStation 3 titles?
Yves Guillemot: Yes, I think at least. It should be even superior for some of the games. We don't know everything, so we have a few things Nintendo is telling us that will have such and such powers.
Q: How long have you been working with the technology?
Yves Guillemot: I'm not sure of the exact date but it has been a project for quite some time.
Q: Developing for the Wii U, how significantly does that raise your development costs in the AAA space?
Yves Guillemot: It doesn't increase it very much because the advantage is in being close to the other machines, you can do the game for all the formats at the same time. It's a way to reach new families that may not have a PlayStation 3 or an Xbox 360. And with this interface it's a new way to play, so many families who don't play games will find it easier to use that controller.
Q: Do you think you'll create contact exclusively for that or do you see it more as a third location for your big franchises?
Yves Guillemot: It will be both, new content and a third location.
Q: Ubisoft recently announced plans to move into movie and TV production. What was the thinking behind that decision? Why move into that different entertainment space?
Yves Guillemot: It's just because we think that our consumers are very interested by that, so we try to bring them what they expect. And what's really happening is the machines will be so powerful, are already so powerful, and will continue to evolve, so that we will be able to do linear content for a cost that is very low. So why not take that opportunity?
Q: You guys have 25 years of history in creating games, but not in creating movies and TV, is that a big risk?
Yves Guillemot: You know the TV business is an interesting business because everything is pre-sold before you start creating the project, so it's not that risky. And then you can, because its an industry where you can recruit people for a short time to come to you to help, you can quickly get the talent, the financing, it's a way to expand your brand without taking too much risk. It gives you the possibility to reuse the content for your games, so its really complementary to the games. And if you can have 20 per cent or 30 per cent of your content that is created for the TV series that you can reuse in your game it's a way to reduce the cost of the game or to do a better game.
Q: That's interesting because obviously we know AAA costs are incredibly high, what other kind of methods can you use to keep a handle on those development costs?
Yves Guillemot: The most important thing is to sell more, to have the chance to reach a larger audience. That's what we think is the best way to sell more. And to reach a larger audience if you have a TV series, and you have lots of other projects, or even if you go on a tablet or an iPhone they try your property there and they want to see more and get more into those universes. So you can take them to buy high end games.
Q: So do you think development costs will continue to rise?
Yves Guillemot: Yes. I think so, on the high definition formats, yes. So we just have to make sure we get more revenue and diversify.
Q: Going into movie and TV production, is that an admission that the AAA market isn't as profitable as it used to be?
Yves Guillemot: It has nothing to do with it. It's just we think that it's so easy to do, that it would be a shame not to try. The other thing which is important also is that when we do those movies or TV series, we take talent from that industry who are helping us to do a better job for the games. Really at the end of the day our goal is to make sure that we have better games with bigger worlds and universes and so on, and that we use all the many people around to achieve that goal.
Q: Can I ask you about the current state of the European games market? Obviously you're a French publisher and have a much better insight than other publishers. What's your current assessment of the European games market in terms of console sales and software sales? Where are the strong regions, the slower regions?
I always like a new generation of consoles because it's really the best way for us to be more creative
Yves Guillemot: Yes, Europe has always been strong for Ubisoft. It has generally been more than 50 per cent, the US is generally the second market with a huge penetration and in Asia we are starting to grow there using the free to play model. That is allowing us to get rich new markets.
Q: In Europe are there particular countries that are much stronger than others? Are there countries where sales have declined?
Yves Guillemot: The UK is declining quite fast. It's declining, if we don't take into account the digital revenue. When you take everything into account it's stable.
Q: But the actual software, the boxed product...
Yves Guillemot: ...is declining.
Q: Do think there's anything console manufacturers can do to help that?
Yves Guillemot: I think it's really linked to quality of the games, the more new games we have the better. We need fresh machines from time to time so that people can go for it and like it.
Q: Do you think a price cut on Xbox 360 and PlayStation 3 would help?
Yves Guillemot: This year they will continue to drop the price, I think so. Nintendo already announced that they will do price cuts...
Q: With the Wii U coming out and PlayStation Vita, that's almost the start of a new generation of consoles. Are you ready for that move? Are you happy to be moving on to the new generation of consoles?
Yves Guillemot: I always like a new generation of consoles because it's really the best way for us to be more creative. It gives you lots of new ways to create. And also the gamers are more open to innovation when a new console is coming, they don't consider all the brands the same way, so they go after something completely new and they try it. When the machines have been there for a long time you can always improve and increase the quality, but you don't make revolutions in the way things are done.
Q: Do you think the current market has become a little bit stagnant and it's time to move on...
Yves Guillemot: I think it is time, it is time. And that's why I'm very happy when Nintendo comes with a new console.
Q: When do you think Sony and Microsoft might do something similar?
Yves Guillemot: I don't know, you should ask them. But I think they are going to get pressure from Nintendo.
Q: I guess you're kind of investing in future technology as well, for future platforms although they've not been announced. You've got to have the money there to invest, is that the right assessment? That you've got money set aside to put in to creating new products for new technology.
Yves Guillemot: What we do is we always try to create a game that is going to help to create new technology. So it's always linked to a game or type of new game, new machine. So yes we are developing lots of technology, but that is all the time for the games we create.
Q: Are you still interested in 3D? It seems to have lost a lot of buzz as a concept.
Yves Guillemot: Yes. Most of our games are going to be 3D.
Q: Do you think 3D is pushing developers to be more creative in the products they make?
Yves Guillemot: I think the 3DS showed that you can have different experiences. It's just the beginning of the 3DS, it will take time because they didn't react as well as I thought they would react, because it has to be really tuned, but I think the experience when you can be more immersive is going to very interesting. Especially with characters, you feel the emotion in the characters you meet, 3D can help with that. So we'll see more and more 3D in the characters so that they can be more expressive and we can believe more in their emotion.
Q: You're celebrating 25 years at Ubisoft this year, it's an incredible achievement, especially in such a volatile market. What has been the biggest achievements for Ubisoft over that time?
Yves Guillemot: I would say each console transition has been a challenge, each time. A challenge that also brought lots of new opportunities. And so each time a transition comes you know we don't only have the console changing but we have the iPad, the iPhone, Facebook and so on, and all those times have been challenging, but each time we were able to react and bring something that used all the capacities of the new possibilities, and I think that is what is the most interesting part of this industry. You have challenges and you have a team that is going after those challenges and succeeding in making different games that are taking all the possibilities or new ways of playing with your friends.