Just over one year ago, Ubisoft CEO Yves Guillemot fired a warning shot at EA and Activision.
The resolute yet softly-spoken Frenchmen told MCV that Ubisoft was on a trajectory to become the No.1 publisher in the world.
Today, he’s not so sure.
“The market is changing,” he says. “We now have a lot of new players coming in. What we see is that the overall industry is growing fast, so it is very important to expand in these different fields. I said [we could be No.1] when we had a specific market. But today we are re-examining. Maybe we will be No.1. I don’t know. I have to look at this ‘new world’ to see what we can do there.”
This isn’t Guillemot giving up on that No.1 dream. But rather an admission that today his competitors aren’t just Activision and EA. It is Zynga. Bigpoint. Rovio.
He adds: “It is good to have more competition and more potential. These companies will help this industry attract more customers. We have been waiting a long time to hit mass market, and it’s happened. We now build machines that are accessible. Look at Wii U, iPhone and Samsung Note, all of these devices reach more people and are easy to play on. There are a ton of opportunities out there thanks to them.”
Indeed, Guillemot is in a buoyant mood ahead of his E3 conference. If he – like many in the games industry – is feeling the pressure from an uncertain games market, he’s doing an impressive job of hiding it.
Part of his positivity comes from the £30m profit Ubisoft made in its fiscal year. Not bad for a firm that made several commercial and critical risks last year, from psychedelic shooter Child of Eden and stylish 2D platformer Rayman Origins, to new downloadable IP From Dust and I Am Alive.
But that was last year. It’s the next 12 months that will act as a ‘turning point’ for Ubisoft.
“A lot of the work we have been doing over the past couple of years is really coming to life now,” he says.
“We have good quality and lots of diversity in the portfolio, which is targeting more people than before. That is what is helping the company come back with a lot of great creations and brands for everybody.”
Part of this ‘turning point’ is thanks to free-to-play. Ubisoft has spent considerable sums of money building the likes of Howrse and The Settlers Online in this space, and is now starting to see some decent returns. But why has it taken so long to generate revenue from this sector?
Guillemot says: “Those worlds are a little different. You have to create MMOs, in a way. Games that will last for a long time, that will need servers and are made differently. There are advantages and disadvantages. It takes a while, but once you are in, you are in for a long time.”
CORE AND CASUAL
Ubisoft’s success with free-to-play and downloads meant that digital accounted for eight per cent of its overall revenues.
But it was Ubisoft’s retail offerings that stole the headlines during its E3 showcase, with major casual brands such as Just Dance 4 announced alongside big core titles such as Splinter Cell Blacklist and Watch Dogs.
It is the core games market that has Guillemot most excited. Ubisoft has one of its most comprehensive core line-ups to-date, with the firm re-entering the shooter space with Ghost Recon and Far Cry, alongside its ‘biggest ever’ Assassin’s Creed and the aforementioned Splinter Cell and Watch Dogs.
“We look at the market going down, but when you look at Xbox 360 and PS3, that has been growing. The Wii is going down quickly, but the 360 and PS3 will still be stable this year, and last year it grew five per cent, and the previous year by 18 per cent. It is still a strong market.
“At the end of the cycle, we have seen that it is the big blockbusters that are achieving enormous sales, and the small products are doing nothing. It is competitive, but it is great for the big product.”
In contrast, Ubisoft revealed conservative expectations for its casual business in its latest financial report. Even predicting that its multi-million selling Just Dance franchise is likely to dip over the course of the next 12 months.
But Guillemot adds that what he tells shareholders and what he expects, can actually be very different.
“We did so well last year, that to do even better this year puts a lot of pressure on all of our teams,” he explains.
“But that’s what we have asked them to do. What we expect and what we put in our financials are different. We expect the casual market to keep growing, but we want to be prudent on our numbers.”
Does that mean Just Dance isn’t a series set for decline?
“We have been dancing for thousands of years, so there’s no reason it would slow down. And Just Dance 4 is coming on Wii U also, and that will be a new experience again.”
UBI LOVES U
Ubisoft likes to jump in with both feet when it comes to new hardware launches. And that’s exactly what it is doing with Wii U.
The firm is planning to release eight Wii U games during the machine’s first six months on the market, including hit Wii brands as Rabbids, Just Dance and Your Shape.
But is Wii U really going to be another console for the casual gamer? Nintendo has been stressing the importance of appealing to core fans this time around. So what audience is Ubisoft expecting at launch?
“The key thing is that we are really behind Wii U, with lots of very high quality games that take advantage of the machine,’ says Guillemot.
“There’s two ways to play. The fact that you have now the Wii Remote on one side and the tablet controller on the other, is going to give the ability to play different games in front of the TV.
“We are creating games for gamers, so we have an Assassin’s Creed and ZombiU. And on the other side we have games for the families, so Just Dance 4, Sports Connection, Your Shape, and Marvel Avengers. We have a good diversity of products on Wii U.”
A part of Ubisoft’s current success has been its innate ability to defy the rule that ‘third party publishers can’t succeed on Nintendo consoles’. How is it that Ubisoft can perform so well with Nintendo, when many of its rivals are struggling?
“We love Nintendo. Our creators have been playing Nintendo games for ages and they love what they have come out with. They also generally bring out machines that have new possibilities for gamers. So we can be innovative, and that is what makes our creators very attracted to Nintendo’s machines.”
Ubisoft’s ambition is no-longer to beat EA to become the No.1 boxed games publisher. It has set its sights much higher. This is a publisher with a potential blockbuster on every platform, from browsers to Wii U.
And it is a company that has its eyes on the next generation, too. In discussing the next PlayStation and Xbox, Guillemot mentions the need for improved social elements, the capability of selling in-game items, and gamers’ desire “to do what they do from any device anywhere.” Like with all new hardware, Ubisoft can’t wait to get started.
“I see a new energy in the industry at the moment, where lots of people are seeing the potential of all these new opportunities,” says Guillemot.
“I think the industry is reshaping for growth, and will be very strong in the next ten years.”