INTERVIEW – Ubisoft

What do you think was the secret behind such a successful 2007 for the company?

The key to the performance was a combination of elements. The most important was innovation. We were able to be successful with new products on the casual business, with a lot of new products for girls and the Petz line. On the other side, Assassin’s was new, offering something that wasn’t on the market before and that really helped demand. That’s down to the quality of the studios and the people in them.

Ubisoft has been a strong performer on Nintendo formats – what’s your strategy with Wii going forward?

Nintendo’s approach to open video games to a larger audience is excellent for the industry. They offer a new experience that is being played by people who couldn’t play before.

It’s an easier industry to access now. The machine is really something and our creatives can take more risks in new content. That will really help the whole business to grow.

Many third-parties are somewhat struggling on Wii. What could others do to share in your success?

Lots of publishers are after that market as well now, and I have no doubt they can do good business like us on Wii. We went early on the machine; we thought it would change the business. That gave us the opportunity to do new things and bring brands like Rayman, Red Steel and our Petz series to market.

Those new things are going to be successful in the future and we’ll continue to create new brands for the machine. Compared with other publishers, the difference was going early as well as the huge amount of creativity we channel into the machine.

Are you looking to increase focus on any particular format this year?

The goal is to continue investing in all the new forms of entertainment. We will launch lots of other products that will be free to play and in which you can buy items and have a monthly fee. We will continue to innovate using the capacity of all those machines, XBLA, and also Home on PS3. They are opening new fields in terms of what can be done.

What is your view on the console race between Wii, PS3 and 360?

A lot of Microsoft’s success depends on quality of software, and software adapted to the territories the machines are in. The three manufacturers will invest heavily to make their formats strong in Europe. Each has its pluses and minuses, so it’s difficult to know now who will win. It will depend on the software.

We see Nintendo already in front and they will continue to overperform. The battle between Sony and Microsoft is more interesting. In the UK, it looks like Microsoft is in the pole position. In continental Europe, Sony is growing faster at the moment. PS3 will be more powerful in continental Europe. In the UK, there is a big chance Microsoft will remain on top.

You’re now secure in third place in terms of global independant publisher rankings. Do you have further ambitions to catch EA and Activision/Blizzard?

I would say we want to do better than those guys at some point. We’ll try to grow at the speed that will allow us to do better than them. Internally, we expect to grow our revenues by 20 per cent every year. We are looking at other possibilities all the time that could give us an opportunity to catch those guys.

Vivendi and Activision combining is one step further than we’ve seen before. In continuing to improve the quality of our games and finding new brands and technology, increasing our studios will help us to perform. The key to success as you see with World of Warcraft is the quality of the games. If we can achieve that, the turnover can change quite fast.

New IP was quite sparse last year – but Assassin’s Creed was huge. Has that made you braver?

Yes – each time we succeed with new IP it helps to strengthen our strategy in launching new IP. We are launching new IP for the future because we see this strategy is working well. We’re working hard on new IP and take time to create important new IP, with a couple of them arriving each year.

Do you have any plans to take better advantage of the MMO and Far Eastern markets in future?

Yes. This is why we are launching free-to-play MMOs with items to buy. This will help us grow in that field. We have a free MMO in the market already, but we plan to increase our investment in those new games.

We did that last year, and we’ll do it again in 2008 to make sure we can take a piece of that business and understand a little bit more about what’s happening there. It’s a new field so we need to learn a lot. But it’s a very interesting field because there are lots of customers and they react fast.

Are there any other areas that you feel Ubisoft can improve upon going forward?

We think there will be a huge convergence with the next-gen consoles. We’re working on that now. The capacity of the next-gen consoles will actually bring us new possibilities, and in those we will need to do well. We will need to learn what they do in the movie industry to create characters, to animate characters, creating background, working better to tell stories.

Do you have any concerns about the consolidation of publishers in the West? Or the re-entry of major media companies into the industry?

We have no concern about the fact more people might come into the industry – it can only make it more powerful. It’s good enough that there’s enough money invested in the industry that new inventions and ideas come. When somebody’s doing something great, we are always looking at how we could do better. More innovation will actually boost the industry and push us to do more. I’m more interested to see what those new guys can bring and see how we can beat them.

Do you expect more publisher acquisitions this year?

For sure. The Activision-Vivendi deal has put pressure on the industry and there will be more things happening.

Do you think Ubisoft could ever be up for sale? Does it have a price?

The thing for us is the potential business in front of us – all the new fields that are opening – are really showing that we are at the beginning of what can be done in the industry. For us, it’s much more about developing in those directions than selling today. There are lots of opportunities – we are not at all in a maturing business, we are in a booming business. It’s time to see how we can take advantage of those opportunities than thinking about selling the company.

What will be different at Ubidays this year – and what sets it apart from other trade events?

We analysed everything that happened last year. It will be more interesting and there are more things on offer. We do Ubidays because we had E3 before. We thought it was the best show for the industry and to show the outside world. It was extremely powerful for all publishers; all members of the industry. Is showed the products in good conditions with space, time and good quality environment. People can take the time to look at them and speak about them. It is very important to show products. Our industry is growing and more and more people want to see projects early.

Is the UK Government’s refusal to implement tax breaks damaging the reputation of our studios?

We have a studio in the UK working on Driver, and those guys are doing a great job. We think we’ll have an exceptional product. The people that manage Government need to understand this industry is at the beginning. If they don’t facilitate the ability for the industry to take risk in the country, this industry will grow elsewhere.

When we look at the UK, lots of business had trouble because the pound was going through the roof in the last few years. When the pound goes up, so does the cost, but the cost for other things is going down – petrol, for example. The strategy Government must have is how they can compensate the advantage of having a very strong pound with the problem that it puts on all the creative people that can create the future.

That’s why being smart and helping those guys create can keep the industry healthy when the money’s too high. The money is going up and down, but the products only take two years. Even if your pound is at the right place later, you can kill the industry and get yourself in trouble.

Is it unfair on the UK games industry that the Government gives more financial assistance to creative industries abroad?

There are more people playing games than ever, and that will help more politicians understand what the industry is bringing – both in terms of fun and revenue. They will understand that more and more.

The Wii and DS is helping that tremendously. I think we will have less and less problems with government. But at the minute there are people who don’t play that think they know what this industry is and they make mistakes. It’s important to get them playing and understand the industry.

Why are games companies unfancied on the stock market?

It’s a simple process. You have winners and losers because some products do better than others. Investors really look at all the products and the capacity of the different players and they invest quickly in companies doing well. It’s a very profitable industry for those who understand what will make the difference. Those not close enough to the industry make losses.