Alain Corre - Part Two

Well, we've been thinking about this merger for a while. It's changing quite a bit in the industry, because now you have two companies that have the ambition to take more than USD 4-5 billion in revenue.

You have these two, and we are number three - and our target is to take EUR 1 billion this year. That's a good currency, but still it's far from the first two, so obviously we have to look at that carefully.

We've been growing at a fast pace, more or less 20 per cent per cent over the last ten years, more or less. So that's the plan going forward, but I think we need to increase the speed of growth, because we need to be as close as possible to those two.

The growth has been organic until now, and I think it's been one of the best assets for Ubisoft, to be able to create our own studios, our own IPs, and increase the number of sales per SKU, to create more hits and sell more units per great product. I think that's something we have to increase, so we have to create and produce more products with higher quality, to do more business with our franchises and build new franchises. That's really what we're aiming at - it's still the core business we have and want to develop.

Apart from that we're also completed some acquisitions over the past few years - Reflections was one, the Anno brand was another, and we've just acquired a CGI studio in Canada to give us the muscle to achieve our ambition of making CGI movies in the next 3-4 years.

I think we'll make some more acquisitions, we're looking at every opportunity. Clearly what we're interested in doing is buying brands, buying talents and teams that can be complimentary to Ubisoft in fields that we're not covering yet.

Basically it's to increase the speed of what we're already doing now - that's the strategy we have, in the next two years to bridge the gap between the top two and ourselves.

We've been used to living with that emotion since December 2004 anyway. We've been able to live with it, and you've seen the people within the company being extremely motivated to go on building, to go on grabbing market share. And we still have this spirit in mind.

When you're successful, when you grow, when there's stability and you're producing great products I think that motivation is intact and you can attract new talents and build for the future. That's what we've been doing, and that's what we have to do. Quality, success and growth is really the key to our future, for every company - but even more for us. Everybody knows that, and everybody is extra motivated by it.

Maybe that's why so many of Ubisoft's key people have been with the company for many, many years - remaining and believing in what we can bring with the future of the company. I think that's a strength that's not common in a lot of companies.

Playing online is something that's developing more and more, but playing online doesn't just mean playing in an MMO. More and more people are playing casual games, they're playing web-based games a lot in Asia, they are playing with mobiles, and our strategy is now to try and understand this business better and to try to establish some revenue streams from there.

We're developing some web-based games, the first of which will come this year is Heroes of Might & Magic: Kingdoms. We're going to try some things in this segment to first understand how to treat these consumers, how to position our product to get revenues from them, and ultimately to have a long-term and perennial revenue stream from them.

On the MMO side, a light MMO is something we're looking at carefully, but heavy MMOs - we haven't decided to invest there yet. Why? Because I think it's a great risk. To create a strong MMO costs around USD 50 million, that's just for the creation, and after that you have all the back-end, the management...it's an industry, a company on its own.

If you look at Blizzard, it's been doing only that for the last five years, more or less - maybe more. It's very successful, but it's very focused. We have a lot of development on a lot of products in a lot of areas, on the hardcore, on Games for Everyone, on Wii, on DS, on everything - so I think it's important that we remain focused on what we know how to do best.

Regarding heavy MMOs, we're always looking at opportunities that we could go for, with external partners or whatever, but for the moment we haven't decided to go there yet. It's too costly, very competitive, and we know there's a monster taking 85 per cent of funds in the West - to fight against it is not easy. We've seen all the other ones come in - Lord of the Rings Online, Conan - and we're looking very closely to see if the community playing them are staying, or if there's churn. For now the model isn't ideal for us.

That's the plan, and as we did in Montreal ten years ago, we're interested in every country that offers to subsidise a bit our investment in the country. Because as you know, when you create an office it takes time to recruit people, to train them up enough to produce great products. It takes time and investment on our part, so we also have assistance from the government's locally.

Singapore was very keen in trying to attract us, and also build the multimedia hub, so we found a good agreement with them - so it's on. The aim is to reach a few hundred people in the studio very soon, to ramp up, and to mirror a bit what we've done in Montreal.

And we're trying to also grab the best talents from the rest of the world, because our world of games is multicultural - everybody's playing - so we need to put a bit of each culture in the game to give it worldwide appeal. So being in Singapore is good for us as well.

I think so. That part of the world is also playing a lot. Korea used to be one of the best PC markets in the world and after that one of the best PC online markets in the world. So they love playing games, it's just that they went on MMOs or online games without paying anything, so now they're not used to paying for videogames.

But it depends on the quality we're bringing to them. We've seen also the introduction of the Wii and DS in Korea, and it's doing very well. Korea is a huge country - so I think the potential between Korea, Taiwan, Singapore, Hong Kong, Indonesia, the Philippines - it's getting bigger and bigger.

Piracy is still strong on PC, but on the console side we've clearly seen that Hong Kong and Singapore and others have grown a lot on Xbox 360 and PlayStation 3 as well, on the Wii although it was imported. So if you take the potential of those countries for console, it's huge.

And we're there - we're settled in Hong Kong. Asia will be developed, the market can grow very quickly.

For E3, it's very important to be there, and to present the games, because even though it's much, much smaller than it used to be, still the America media are here, all our competitors, so you need be there, to be ready and to share product.

It's one milestone in the communication of your products throughout the year, and it's important because it's the ramp-up for Christmas.

Now, how it's organised today, here in the Convention Center, this place isn't adapted any more to what E3 has become. First I think that to have E3 in the middle of July is not ideal for us, because products are already known and the communication has already been done over the past three or four months already - so it's just a re-confirmation of what we have.

So people were saying that there weren't a lot of announcements, but there can't be, because we are too close to the Holiday season. So I think it's not good timing, and I think May is the ideal time to show new products, in time for the Christmas period.

In terms of size - clearly it's small. We used to have West Hall, plus South Hall, plus Kentia Hall, plus Concourse Hall…and now it's just Concourse Hall for everybody with games that have been shown already - so there's nothing new there, and not a lot of people playing around.

There are no retailers at all, from anywhere on the planet - not even the US retailers are there, and there are very few media outlets from outside of the US. Even the mainstream media from the US aren't there.

So it's too small, because it's too late, and because a lot of things have already happened - we spent a lot before to do Ubidays, and other publishers have had their own shows, because we had to show something in May, it was important.

E3 here, mid-July, in the Convention Center in downtown LA - it's not appropriate I would say. What we would like, and we're discussing that, is to have an E3 back in May with a bigger size. It shouldn't be at the same level [as 2006] because it was getting too big, it was a funfair, and the cost was too heavy for everybody.

It has to be a reasonable size with some reasonable limits as to size, noise, attendees or whatever, but with a bigger ambition than the one we have this year.

This year we're happy because the response to our products has been good, people loved it. The press conference went well, so we can't say we're not happy with this E3 after the first day. It's just that it could be even more efficient if it was done in a different way - earlier in the year, and in a bigger way with everybody.

That way all the media would come and cover it, and it's good for the whole industry when you have CNN coming - you don't have CNN coming this year, it's finished.