GamesBeat

Ubisoft CEO Yves Guillemot sees big opportunity in the console transition (interview)

yves guillemot

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LOS ANGELES — Ubisoft chief executive Yves Guillemot is familiar with risk. He asks his teams at the French game publisher to make big bets on new intellectual properties all of the time. But Guillemot hopes the new games will thrive on the new platforms that are launching later this year. He has made big bets on the PlayStation 4 and Xbox One.

Guillemot met with a group of journalists Sunday evening, before the press conferences that opened E3. So we talked to him before Sony and Microsoft battled each other Monday.

Here’s an edited transcript of our talk.

xbox one controllerGamesBeat: Microsoft has started a lot of controversy over what it’s doing with used games on the Xbox One. Sony hasn’t said anything either way [Sony now says no restrictions on used games]. What’s your opinion on this? Do used games hurt the market or help it?

Yves Guillemot: Microsoft’s decision to go for no tax on what’s done in stores is the right decision, I think. It means that we can have something that’s close to what we have today, with the older generation. There’s nobody in between that takes a big fee. At Ubisoft, we’re likewise waiting to see what Sony has to say, but the first move from Microsoft is a good move.

For each transition, people will have to adapt – not only gamers, but manufacturers as well. They come up with a model. Consumers react to that model. Then they’ll have to change certain things to that it fits with what consumers want to play and the experiences they want to enjoy. You’ll see adjustments coming, so that we’ll be able to take advantage of all the software features of these consoles.

GamesBeat: So you think they’ll adjust what they’re offering to suit the demands coming from the market?

Guillemot: Yeah. You always have your theories about who will like this or like that, but it’s not until it’s in front of your customers that they say yes or no. Then you adapt to fit what they want. Today we’re at a phase where the manufacturers are saying, “We think it should be like this,” and consumers are saying, “Well, I don’t like this,” or “I’d like some more information about that.” I think Microsoft and Sony will make sure that the experience will be good for the consumer and bring greater innovation over the older generation. I’m not too worried.

GamesBeat: Microsoft’s said that publishers can choose to charge a fee to activate used games if they want. Have you decided which way Ubisoft will go on that?

Guillemot: We’re waiting to see what all the manufacturers are doing before we settle on what we’ll do. We’re waiting now for Sony’s position and to see if Nintendo will continue as they have in the past.

Xbox One

Above: The Xbox One collection.

GamesBeat: If Sony adopts the same policy as Microsoft has and used games do become a thing of the past, do you accept the logic that with games retailing at $60 or $70, people will just buy fewer of them?

Guillemot: From the beginning, I’ve liked used games. It gives gamers the option of taking more risks. Instead of buying three games, they can buy five or eight, and it helps to make sure that people can play different types of games and enjoy those great experiences and so on. What’s happening with boxes is that people play a game, and they come in four weeks or six weeks later to trade that game in and buy another one. I think that process is working fine. It’s just when if the guy comes in three days later to take the game back, that not going to be able to sell new ones. It’s to everyone’s benefit that we sell enough so that we can reinvest.

So the way used games happen in stores with boxes these days, I think it’s fine. There’s no reason we can’t continue like this. The only problem is how much support you have to give to those games, like with multiplayer – we need to pull in some revenue to provide support for those players. If you can sell extra content, you can pay for the post-launch team and continue to provide the experience.

We very much like the fact that players can buy many different games, because that means we can have many hits all through the year, especially at Christmas. You’re either part of that or not, so the risk increases a lot.

GamesBeat: Are publishers keeping the price of digitally delivered games artificially high? The price of a new game on Origin or uPlay is usually the same as the boxed release. Is that your choice, or do retailers require that of you?

Guillemot: It’s a difficult question. It’s hard to discount a game too much on digital if it’s in stores at a different price, because that puts retailers in trouble. A lot of consumers buy secondhand, it’s true, but there are also a lot who never do. Those guys, whether they buy online or if they buy in store, they don’t ever plan to exchange that product. For them, it’s the same thing. For a person who regularly resells their game, they still have an extra reason to go to the store.

If you look at Steam, they do a lot of discounting, but they take 60 percent of that business. Discounting digital versions isn’t going to help retail to succeed. We want retail to keep going and to grow, because those guys have people in stores who can help gamers learn about what we’re releasing. They can share that love of gaming. When you’re only buying your games online, certainly you can look at comments from other gamers, but you don’t have that relationship with another person. And it’s not only that. It’s also the visibility your games have in so many stores.

Things will change, step by step, but we’d prefer the transition to be smooth than to go too quickly.

Smiling Jack TrettonGamesBeat: Taking the publisher’s point of view, it’s easy enough to see why you might not like used games, because obviously, you don’t see a direct percentage of that sale. Microsoft is obviously trying to find a technological solution for that. Have you tried a business solution for that, where you negotiate with retailers and try to get a percentage of those used game sales?

Guillemot: We haven’t negotiated anything. We’re watching for the moment. Manufacturers very often define these sorts of policies, and as publishers we try to follow them. In the past, they’ve shown that they can take good care of the industry. We’ll let them do what they think is right. We can influence them. When we see them going somewhere we don’t want, we try to push a bit for things that we think are good for publishers and consumers.

GamesBeat: A few years ago, you brought Rayman back with great success. Earlier this year, you decided to postpone the latest entry to get in line with the launch of the new platforms. Do you still stand behind that decision? There seemed to be some bad PR, some bad feeling surrounding that choice at the time.

Guillemot: I’d probably participate more in that discussion. What happened was that we saw the Wii U was not going to sell enough of those games. The game is going to be fantastic, and we didn’t want those creators to wind up in a position where even after making a fantastic game, they didn’t sell well enough. We decided that we had to come out on enough machines that players can try it out on any one that they have, and give more time to both improve the game on the Wii U and create versions for the other consoles.

I think it was the right decision for gamers and for the team. My role is to make sure that the team is happy with the quality of the work they do and the reach they can have. The quality is there now, because they had more time. They’ve expanded the possibilities of the game. It’s much bigger content-wise. We have new bosses in key levels and so on. The experience is much more complete. I think it will be one of the best games we’ve ever done.

Sometimes we have to go against the urge to get to market too fast. We have to make sure we give enough time and resources to our creators to they can reach the potential in their games. This time, they were very close to excellence, but not quite there.

GamesBeat: Can you tell us more about Beyond Good & Evil? There was some sort of teaser page up today, some image.

Guillemot: That wasn’t meant to be a tease. It was just part of our promotion in the run-up to E3 – homaging some of the characters from our past. I think that was maybe misinterpreted.

I think the first game was exceptional, and people remember the experience they had, so they would like to see it again. We had a period where we had a demo that went out before it was quite ready, so everybody saw something that appealed to them. That’s why I think they keep expecting something. But I can’t say much more than that.

GamesBeat: You’ve been open about your belief that an earlier debut for the next-generation consoles would have been good for the industry. At the same time, the Assassin’s Creed franchise grew every year on the current generation of hardware. Do you think it really would have done us that much good?

Guillemot: First of all, I’m happy they’re coming now. Each time a new generation arrives, the market grows very quickly. They waited, but they took in a lot of new innovations from the market. We think this will give this the ability to create a high level of quality again. We have some time to wait. We’re still in good shape. We’ve used the time to invest in the past few years, so we’re ready. That said, if the generation after this didn’t take another eight years, I wouldn’t mind.

GamesBeat: Are you certain that his generation will see that kind of continued growth for the console market, with so many hardcore gamers on the PC now and the increasing ease of distribution there?

Guillemot: It’s a challenge. The answer to that challenge is quality. If we manage to create great experiences that are stable and easy to play for everybody, and that the systems themselves are more stable than the PC, we’ll still be able to provide a better experience than the PC. Hopefully we’ll be able to pull some of those guys back. Likewise, hopefully we’ll be able to pull in some of the people who got into gaming through tablets and mobile, and who now want more.

GamesBeat: How would you define the best length of a console cycle?

Guillemot: Our engineers and artists usually master the potential of a console in three to four years. After that, we don’t have much room to surprise people. We can increase the size of our games and try to do other things to differentiate ourselves, but when we change machines, we have all sorts of possibilities that give us the chance to innovate further.

Also, around a transition, consumers and retailers are more open to new kinds of games. When we have a new machine, we tell our teams to go for whatever they want. They have the opportunity to try new things, because we know the market is more likely to bite. At the end of the cycle, people may say they want new stuff, but they don’t buy it very often. They have all the games they want from familiar franchises, and they go to those first. At the beginning of a generation, it’s the opposite. People go for something that’s new and innovative first, to established brands second.

GamesBeat: What can you say about the price of next-gen games? We’ve heard rumors of an increase to as much as 75 euros from some sources.

Guillemot: You may see increases here or there, but altogether I think prices will be the same. The expectation is that because those games can last longer, we can get more money for that experience. If we manage to deliver a longer experience, people will buy more downloadable content, more things in the game.

GamesBeat: New technology is providing you with more opportunities and possibilities in game development, but that also means you have to invest more money in research and the like. When do you think your budgeting reaches a tipping point in relation to price? There has to eventually be a threshold beyond which you can’t keep spending.

Guillemot: That’s a good question. What we saw all through the last generation is that we could find enough customers to justify increasing our budgets. I think it will be the same this time. We’ll keep extending our reach. Each generation has seen us be able to draw more and more revenue from the games we create. Last time, we increased the price by $10, which gave us the opportunity to increase our budgets. This time we’ll do more digital distribution. That will bring in more revenue and allow us to do extra content. We don’t necessarily expect more revenue on the front end, but through better distribution systems and techniques like seamless gaming, you’ll be able to get more hours of gameplay for the same cost.

GamesBeat: What do you think about the success of multiplayer online battle arena games like League of Legends?

Guillemot: The interesting thing about that genre is that it provides a stage for people. If you’re good, you can progress and be recognized by lots of other gamers. I think we’ll be able to do that on PC and on console as well, because eSports are going to be developing in both places. The competition is on, and we’ll be trying to bring something that can be interesting enough to pull players away from the hits in the genre.

GamesBeat: What’s your view on what’s happening lately with mobile games and the intersection of the game and toy markets? Those are both fast-growing areas.

Guillemot: First of all, we love the fact that mobile has come in, because it’s giving a chance to people who have never played before. Thanks to the interface, it’s a lot more accessible. Nintendo took a first step with the Wiimote, where people got into it because it was easy to play. Apple came after that and gave us touch controls, which went even further. What we think is that if we can give these people an easy method of access, we’ll be able to convert a part of those customers to playing on consoles or using a mobile component of a game that runs on consoles.

That’s the positive part. On the other side, we’re investing in the mobile business to create products for that market directly. In a way, it’s the new mass-market segment. Some kinds of games there are interesting, but they only appeal to a certain part of the market. We’ll soon have two businesses. If we an immerse you, if we can allow you to live a different life, it’s not the same as playing something like Clash of Clans – which is a fantastic game, but after a while it’s still a bit repetitive.

As for Skylanders, it’s a fantastic idea. We’re working in that direction as well, with products that will take advantage of Kinect. I think we’ll be doing that more and more. We’ll be trying to get a share of that business. The basic idea of combining something physical with something virtual is very strong – it’s a way to get into a fantasy world, but at the same time keep a part of your reality with you. I can see it continuing to grow, so long as the games themselves continue to be of high quality.