Q&A: CEO Guillemot on Ubisoft's origins, China expansion

Gamasutra spoke to CEO Yves Guillemot about Ubisoft’s origins as an agricultural trader, why it chose to expand to China in 1996, and how he supports creativity and risk-taking within the company.

Ubisoft was the first Western publisher to take notice of China. The company expanded into the country with Ubisoft Shanghai all the way back in 1996. Over twenty years later, Ubisoft’s Yves Guillemot was at Chinajoy, showing off games including the mobile, China-focused Heroes of Might & Magic: Era of Chaos, as well as localized titles such as For Honor and Steep.

Gamasutra took the opportunity to talk to Guillemot about Ubisoft’s origins as an agricultural trader, why it would choose to expand to China so early, and how Yves himself supports creativity and risk-taking within the company.

Take us back to Ubisoft’s origins.

Yves Guillemot: At the beginning, my parents had a company that was buying and selling goods to people that worked in the countryside—in agriculture. At one point, the state decided that it was not for small companies to do that, but the state. So my parents had to find a new business. And they had to deal with their sons—because we are five brothers—which was, “Okay, we paid for your studies, but you have to come for one year to the company to help.” 

When my first brother came back he tried a new business which was importing CDs, music CDs in France, and that business took off and he did quite well. Until the point where the big majors said, “It’s our business, we don’t need to let the small guys do that.” So they started to take the CD business away. So then we said, “Okay, this one is not going to be. As we don’t publish music, we have to change.” 

"It’s good to distribute products, but we should publish and to do that we have to create games."

In the meantime, nine months before that, my other brother, number 2, came back from school and he saw when he was traveling in the UK that video games were sold at three times less at retail than in France. So he said maybe we could take those games to France and do a mail-order company. So we created a mail-order company, buying from Centersoft in the UK. That took off brilliantly at the beginning of the Amstrad CPC. After a few months, we had retailers saying, “Can we buy from you? Because you’re killing our business because we are selling at two times the price. We can’t survive. We want to buy from you.” So then he did sell to those retailers, and at one point we said “Okay, it’s good to distribute products, but we should publish and to do that we have to create games.” 

Then it was my turn to come home, and take care of publishing. And that’s how Ubisoft was created. I started to create games with a small team, and we also represented publishers outside of France in France. That’s how we started, with Elite System who was doing Ghost and Goblins, Commando, and all those games. That helped us to finance the creation of internal products. We did Zombi and we did a lot of Amstrad products, then ported to Commodore 64, and we realized that we could sell those products in more and more countries so we entered UK with Elite System, Germany with other partners and we went to the US. So we continued to work on both legs, one which was representing publishers and one which was creating our own games to publish worldwide.

We went until a point where we said, “Okay we work with a lot of developers. We have a few people inside, but lots of developers outside. So let’s instead recruit lots of people inside the company and create the future of games.” That’s how we created a big team for Rayman. We then had some people in Montpellier—Michel Ancel was in Montpellier—and some people in Paris.

Very quickly we saw that France was not big enough to create the games we wanted, so we opened a studio in Romania. And then we said, “Okay, we have to go in Asia and America.” So we opened in China in 1996, then Montreal, Canada. So that gave us a chance to recruit different types of people that had another view of the market and a better understanding of those countries.

Skull & Bones is being developed by Ubisoft Singapore

"We went Montreal and China because we said, where do we have to sell products on their own terms? And we said those two territories are the biggest ones and we have to be strong and recruit lots of talent there so that our company becomes a worldwide company."

So it’s the 90s, you’ve made Rayman, and you’ve decided to make a move into China. A huge, very different market. Why would you make that play first, go there rather than any other place?

We really went at the same time to both continents. We went Montreal and China because we said, where do we have to sell products on their own terms? And we said those two territories are the biggest ones and we have to be strong and recruit lots of talent there so that our company becomes a worldwide company. Because a company’s DNA depends very much on the people that are in that company. And it’s so much easier when you have talent that live in the countries to make that company understand what market you are in.

Well, on this trip we’ve visited both Singapore and China, and while Singapore is a majority Chinese country, speaking Mandarin, it feels more international, like it would have been easier to bridge the gap if you went to Singapore first, for example.

You’re right, you’re right. At first in China we experienced difficulties because it was really the beginning of the video game industry here so we had to train everyone. And it was a lot of work. Where in Canada, we could recruit people that were coming from schools. There were lots of schools and we could recruit talents that could quickly create games. Where in China we couldn’t do original games, we had to work on porting some games or just doing parts of games.

"On the mobile side [in China] they have their own IPs, and that is going to continue, because the markets are different. It’s difficult to create games that are sold only in one territory, so we have both kinds of games—Chinese-focused mobile and worldwide games."

You’ve had this studio in China for twenty years, too, and yet with China-focused products you’re still partnering with local studios.

On the mobile side [in China] they have their own IPs, and that is going to continue, because the markets are different. It’s difficult to create games that are sold only in one territory, so we have both kinds of games—Chinese-focused mobile and worldwide games. And the market is more open with Steam available here, and there are more and more European and American brands on the market.

Well, there is Steam, but it’s a challenge to create games and publish games in China with the ‘Great Firewall’. How is it to have to deal with something like that as a global company?

When you have 500 employees in the country, you see it differently. You understand that there’s a different perspective than the one we have in the West, but this organization has good efficiency and people are happy. So when we look at it with our way of seeing things we probably are not in the same shoes as other developers.

It feels like Chinese players respond most strongly to Chinese companies, but they’re also intrigued by the West. Is Ubisoft intent to be seen as a Chinese company, or as a Western company in China?

I think what we want to be seen as is a company that understands the types of games they want to play and give another approach. Which is an approach that will be closer to NetEase or to the companies that they know, but in creating new IPs for China. It’s more that we want to astonish them with new types of experiences.

What is it that you want to give the Chinese market, or what is it that you think that they want?

Because we’ve been here for 20 years, what we do know is that they can like the same products and same games in the rest of the world. Many players buy the same games as in America or Europe, so we know that if they have access to the same types of games, they will play it. There’s not a big difference in terms of the types of games they want to play, but in terms of mobile, as a mass market device, you have to be more locally focused [in terms of IP]. To us, they want the same things as players across the world.

You collaborate with Chinese companies as a way into that market, and you have a very high profile collaboration with Nintendo happening. Would you enter the Japanese market the way you have done in China?

In Japan we are very happy to deal with Nintendo, but with the other publishers we’ve done some deals, but it’s different than what is happening in China. In China you have to deal with Chinese companies simply because you can’t go direct. In Japan the market is open now. We do exchange characters with Square Enix. For example Assassin’s Creed is in their game, they have characters in our games and so on.

I suppose more like how you’re focusing on a mobile Might & Magic designed for the Chinese market here. Similar to China, Korea and Japan have huge markets in mobile, but their top ten iOS/Android games are all local. You wouldn’t create an Ubisoft Kyoto or Ubisoft Seoul to focus on IP for those markets?

We’ve tried, but it didn’t work. Because we are not Japanese enough—even if we have Japanese creators. When you are not Japanese and drive a Japanese team, you still might see what is suitable for the country. Even if the people on that team tell you you should do this or that, at some point you have to take decisions and the decisions you take, as you are not from the country, it’s possible they aren’t adapted correctly.

I don’t actually understand what sets China apart then—how you can be successful here. 

Japan is very different from the rest of the world. They did not consume the same types of products—though it’s changing a little bit now that Japanese publishers are launching less games. The Japanese audience have been used buying no games from the West, so we tend to understand what can be sold in Japan, but if you want to create a Japanese game in Japan, you know that you won’t be able to sell that in the rest of the world—if you want to be very specific. And the market is just not big enough for you to amortize. In China, they are more occidental.  They have been playing all the western games that we love. So when we come out with something like Heroes of Might and Magic… well, in Japan we don’t have fans of Heroes of Might & Magic. Here, for a long time there was no publishing at all, so all the games that came in came from the West. So their childhoods were with Western games, and therefore here we can create games that are Chinese, but which can also be sold worldwide, because they have the culture of what sold worldwide. And if we do do very specific Chinese games, if they do well, the market is big enough to amortize the game just in China.

OK. Let’s talk about Singapore. There you’re working on Skull & Bones, which as a multiplayer sailing game is… kind of a risky play. How do you, as the head of Ubisoft, support and guide that kind of risk?

Generally those risks are incremental. We don’t take a risk to from scratch create something that will be totally new. It can be seen like that, but in fact for us as the team created Black Flag, they have a know-how on this type of game, and we also know that people  already like that gameplay. So we just go one step further, which is, “Okay, that gameplay can be deeper.” It’s more an evolution of what we have done before—to really take the fantasy to its full potential. So that’s what helps me to consider risks, that we validated enough of the steps that we are taking.

But how support creativity when somebody has a new idea or they want to come to you with something, like they’re like, “I think this is going to be really awesome.”

We have a team that selects in that spirit, which is, “Okay, we have to try new things. We want to try new things, and we have the opportunity.” The games industry is constantly being disrupted, and that allows us to take more risks. Our editorial team uses those times when players are looking for something. If you pick the right time, they’ll play what you’re doing and if they like it, they’ll adopt it. It’s the combination of careful timing and creativity that gives the team and myself the follow-through to take those risks and create new IP.

Disclosure: Ubisoft provided Gamasutra’s flight and accommodations for this press tour.

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