You may not know the name Ubisoft, but you probably know some of the company’s franchises: Prince of Persia, Splinter Cell, Ghost Recon, Rainbow Six, Far Cry, Rayman, Raving Rabbids, Just Dance, or Assassin’s Creed. The latter will become more well known with the December 2016 release of an Assassin’s Creed film produced by and starring Michael Fassbender.
This game developer and publisher is based in France, though it has dozens of studios all over the world. It had €1.46 billion ($1.63 billion) in revenue in its last fiscal year. According to the company, it has sold over 500 million games. Fast Company spoke with CEO Yves Guillemot about how the company embraces risk to survive. Here are the ways Ubisoft uses bold choices to operate and succeed.
Ubisoft is known for making games on every platform. The company creates titles for new hardware, seeking to find some business amongst those early adopters, usually by making a game that works to the strengths of the new game hardware.
Guillemot says: “When you start something for a new machine, there’s a big amount of uncertainty. But it’s also about maximum reward. That’s why we go early, so that we can try. If we see quickly it doesn’t work, we don’t continue to invest. But if you wait, when you want to catch up, you have to go twice the speed.”
For Nintendo’s Wii and its unique motion controls, the company made a first-person shooter called Red Steel. When Microsoft released the Kinect camera for Xbox 360, Ubisoft had Your Shape: Fitness Evolved ready. And with Nintendo’s Wii U, it had ZombiU, a game that used the hardware’s tablet-like controller to great effect.
Launching on new consoles early also lets the company establish new franchises, since there is often less competition due to the scarcity of games available at a console’s launch. This is how Ubisoft launched the Assassin’s Creed franchise in 2007, for the young Xbox 360 and PlayStation 3 consoles. The result? A franchise that has sold over 93 million copies across seven main titles and a similar number of ancillary handheld and portable titles.
“The game industry is an industry that loves to renew itself on a regular basis. We feel that there is a good potential to establish brands, especially at the beginning of the cycle. We take advantage of that and try to create brands that can stay for a long time,” says Guillemot.
The risk of starting new game franchises is one thing, but new ways to play in whole other markets is an even greater risk. And it didn’t pay off for Ubisoft. In 2010, the company released toy guns with light sensors called Battle Tag, trying to mimic the feel for first-person shooter video games in real life. It also felt like the Lazer Tag craze of the 90s. And it, too, did not last. But the company learned a valuable, and expensive, lesson.
“It was a big disaster. We needed to master too much at the same time. We had to master hardware and software. Maybe we should master software, which is our business, and then see if we can do something with other hardware. But don’t do both at the same time. It’s too complex,” says Guillemot. “Don’t increase difficulty. Don’t multiply the new things you have to learn.”
When Ubisoft decided to apply the company’s characters and storytelling to a new field, Hollywood, the company knew it couldn’t do it by itself. Ubisoft didn’t want to climb that mountain without a guide. For the Assassin’s Creed film, the company decided to work with director Justin Kurzel and Michael Fassbender.
“Those guys know how to bring emotions. They know how to express themselves. It’s exactly the same business as the one we are in, in video games. So we learn from them,” says Guillemot. “Each time you go into a new business, especially the movie and TV industry, you have to recruit new people. You have to understand the way deals are done. All those things are quite tough to learn and to do well.”
Back in the gaming business, Ubisoft has a history of releasing new kinds of games to grab an under-utilized genre or play style for themselves. Just Dance was somewhat scoffed at by the hardcore gamers, but the franchise has become a solid performer by appealing to female gamers and families that play together. Similarly, Assassin’s Creed was an action-game using swords when gaming was dominated by shooters.
Guillemot says: “Coming early in a segment that is not taken yet is very good. If we do a good job, we can pick up that segment and keep it for 10 years. Assassin’s Creed is one example. If you come early, you have a chance to pick up a market.”
With all this work on new IPs, you would think the company might play it safe with established IPs, but that is not the case. The company often takes old games in new directions. Ubisoft has started experimenting with virtual reality using brands like Far Cry and Raving Rabbids. It also announced the return to multiplayer online gaming, by reimagining it’s Ghost Recon franchise with Ghost Recon Wildlands. The company hadn’t had successful online multiplayer games for years, since the Splinter Cell franchise in the 2000s.
Guillemot says: “The multiplayer aspects, like with Ghost Recon, like For Honor, like Rainbow Six, are the really big segments we want to re-enter, so we can generate more digital revenue. We couldn’t monetize Splinter Cell well and we couldn’t keep people for long enough. We are rethinking the whole thing, making sure we can create content at a reasonable cost, and we can really entertain people when they play those games.”
Getting into new segments, thus complementing your established IPs, results in having your business spread around. And having a wider base of products is always better than focusing on just one thing.
“It helps you to be in other fields, so you can come with different brands on the market, so you don’t have to come with one all the time. It’s more making sure you control an environment. You segment the market and you say, ‘Where is it too busy? Where can I bring something different what others are bringing? And are there places where there is nobody and we have a new technology that will help us succeed?’ “
The company created a new IP with racing game The Crew. The first trailer for the game had a huge response, but the game that was eventually released did not quite meet those expectations. So that one game may have underperformed, but due to the high sales of another new IP, Watch Dogs, as well as Far Cry 4, the company didn’t take too large of a hit.
With all of the company’s bold moves, people tend to remember the successes more than the failures. So the result is not only financial success from the sales of the company’s many franchises, but also popular reverence, a success in the minds of the public.
Every summer, a game convention is held in Los Angeles called E3. Companies show off new games to the media and to others in the industry. And Ubisoft usually walks away having some of the biggest buzz, whether it is from new IP that surprised people–Watch Dogs in 2012, The Division in 2013, and For Honor at E3 2015–or from very effective trailers for existing IP–Assassin’s Creed Unity in 2014, Ghost Recon Wildlands this year. These things have helped Ubisoft stay in the front of gaming in many gamers minds.
And that combination of renewing the old franchises and trying something different with new franchises, that measured use of risk, has made Ubisoft find a different kind of success. The alternative is business as usual.
“Not taking risks is actually the worst risk. If you don’t put enough money on a franchise, and you feel safer that you don’t put enough, so many publishers disappear because of that. You have to take those opportunities when you see them, otherwise they are not there afterwards.”
Correction: A previous version of this article stated Assassin’s Creed at 80 million.