Ubisoft CEO Guillemot Explains What Went Wrong With Avatar

What happened with Ubisoft's Avatar video game, which missed critical and commercial expectations? According to CEO Yves Guillemot, a big part of it was the film's release date.
Despite the box office records of James Cameron's recent CG-heavy film Avatar, Ubisoft Montreal's corresponding video game failed to make much of an impact as either a critical or commercial success -- not placing in the all-formats Top 20 for December 2009. So what happened? According to Ubisoft CEO Yves Guillemot in a recent company conference call, the game was materially harmed by the film releasing so late in the year. "We knew we were taking [some risk]," Guillemot said. "The fact that the movie was coming in December was a potential problem, and it did result in a problem." "We thought the game would continue to sell after the new year," he said, but instead the game followed a more typical post-holiday declining sales curve. "It will be difficult in the future to buy rights to a movie that comes in December, because it's too risky, and it cannot [capture] Christmas season [sales]," the CEO added. "It doesn't work as well for a video game company." Such issues, combined with the frequently compressed development cycles that accompany rigidly-scheduled Hollywood films, make movie tie-ins less desirable than one might think, according to Guillemot. Ubisoft plans to reduce its involvement in that segment, although it will not abandon it entirely. "The goal is to reduce the investment in licenses, and put more emphasis on making our brands bigger [and appear] more often, with very high quality," the executive said. "It doesn't mean we will stop, but we are going to spend less on licenses in the future." Guillemot did also tacitly admit that quality may have suffered on the title due to constrained deadlines: "We want to make sure with those kinds of games, we have time to polish as much as we want. The pressure of the release of the movie is always difficult in our industry, so I would say our goal in the future is to make sure we can have those games ready a long time in advance." Still, CFO Alain Martinez was quick to point out that James Cameron's Avatar: The Game can't be seen as a genuine failure. "Avatar is not a loss-making project," he stressed. "When we lose 1 million sales [from our projections], that's about 30 million euros in sales and 65 or 70 percent of gross margin that has been lost." Those losses have been largely made up by greater-than-expected sales of Assassin's Creed II, he explained, adding, "Where we really had most of our hit has been on the loss on DS products, and on the loss of the non-casual Wii [market] that we feel has been down."

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