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Ubisoft Entertainment SA

Ubisoft's logo since May 2017[1]
Ubisoft's administrative headquarters in Montreuil
Formerly	Ubi Soft Entertainment SA (1986–2003)
Type	Public
Traded as	Euronext: UBI CAC Mid 60 component
Industry	Video game industry
Founded	12 March 1986; 32 years ago (1986-03-12) in Carentoir, France
Founders	Christian Guillemot Claude Guillemot Gérard Guillemot Michel Guillemot Yves Guillemot
Headquarters	Montreuil , France
Area served	Worldwide
Key people	Yves Guillemot (chairman, CEO) Serge Hascoët (CCO) Alain Martinez (CFO)
Brands	See List of Ubisoft games
Revenue	€1,731.894 million[2] (2018)
Operating income	€222.317 million[2] (2018)
Net income	€139.452 million[2] (2018)
Total assets	€2,805.122 million[2] (2018)
Total equity	€889.330 million[2] (2018)
Owner	Guillemot family (18.5%)[3]
Number of employees	13,742[2] (2018)
Subsidiaries	See List of Ubisoft subsidiaries
Website	ubisoft.com

Ubisoft Entertainment SA (/ˈjuːbisɒft/;^[4]French: [ybisɔft]; formerly Ubi Soft Entertainment SA) is a French video game company headquartered in Montreuil, France, with several development studios across the world. It is known for publishing games for several acclaimed video game franchises including Assassin's Creed, Far Cry, Just Dance, Prince of Persia, Rayman, Raving Rabbids, and Tom Clancy's.

As of March 2018, it is the fourth largest publicly-traded game company in the Americas and Europe after Activision Blizzard, Electronic Arts, and Take-Two Interactive in terms of revenue and market capitalisation.^[5]

History

Origins and first decade (1986–1996)

The Guillemot family had established themselves as a farming support business for farmers in the Brittany province in northwest France and nearby regions, including into the United Kingdom. The five sons of the family – Christian, Claude, Gérard, Michel and Yves – helped with the sales, distribution, accounting and management of the company with their parents prior to university. All five gained experience in entrepreneurial while at university, which they brought back to the family business to help improve it, at a time where farming businesses were starting to wane. The brothers came up with the idea of diversification to sell other products of use to farmers; Claude began with selling CD audio media, and later the brothers expanded to computers and additional software which included video games.^[6]

In the early 1980s, they saw that the costs of buying computers and software from a French supplier was more expensive than buying the same materials in the United Kingdom and shipping to France, and came upon the idea of a mail-order business around computers and software. Their mother said they could start their own business this way as long as they managed it themselves and equally split its shares between the five of them. Their first business was Guillemot Informatique, founded in 1984.^[7][8] They originally only sold through mail order, but soon were getting orders from French retailers, since they were able to undercut other suppliers by up to 50% of the cost of new titles. By 1986, this company was earning about 40 million French francs.^[8] In 1985, the brothers established Guillemot Corporation for similar distribution of computer hardware.^[8] As demand continued, the brothers recognized that video game software was becoming a lucrative property, and decided that they needed to get into the development side of the industry, already having insight on the publication and distribution side.^[6] On 12 March 1986, the brothers founded Ubi Soft (formally, Ubi Soft Entertainment S.A.) in Carentoir, a village located in the Morbihan department in Brittany.^[9] The name "Ubi Soft" was selected to represent "ubiquitous" software.^[10]

While they established operating offices in Paris, the brothers used the chateau in Carentoir as the primary space for development, hoping the setting would lure developers, as well as to have a better way to manage expectations of their developers.^[6] However, after about two years, the costs of maintaining the chateau were too expensive, and the developers, about a half-dozen at the time, were given the option to relocate to Paris. One of Ubi Soft's first hires was Michel Ancel who was only a teenager at the time, but had been noticed by the brothers for his animation skills, and he and his family relocated to Carentoir. However, with the chateau's closure, Ancel's family could not afford the cost of living in Paris, and returned to Montpellier in southern France, while the Guillemot brothers told Ancel to keep them abreast of anything he might come up with there.^[6] Ancel came back later with Frédéric Houde with a prototype of a game with highly-animated features which caught the brothers' interest. Michel Guillemot decided to make the project a key one for the company, establishing a studio in Montreuil to house over 100 developers in 1994, and targeting the new line of fifth generation consoles like the Atari Jaguar and PlayStation. Their game, Rayman, was released in 1995 to critical success, and is considered the game that put Ubi Soft in the worldwide spotlight.^[6] Alongside this, Yves managed Guillemot Informatique, making deals with Electronic Arts, Sierra On-Line and MicroProse to distribute their games in France. By the end of the decade, Guillemot Informatique began expanding to other markets, including the United States, the United Kingdom and Germany. They entered the video game distribution and wholesale markets, and by 1993 they had become the largest distributor of video games in France.^[11]

Worldwide growth (1996–2003)

In 1996, Ubi Soft listed its initial public offering and raised over US$80 million in funds to help them to expand the company.^[6] Within two years, the company established worldwide studios in Annecy (1996), Shanghai (1996), Montreal (1997), and Milan (1998).

One difficulty that the brothers found was the lack of an intellectual property that would have a foothold in the United States market; games like Rayman did well in Europe but not overseas.^[6] When widespread growth of the Internet arrived around 1999, the brothers decided to take advantage of this by founding game studios aimed at online free-to-play titles, including GameLoft; this allowed them to license the rights to Ubi Soft properties to these companies, increasing the share value of Ubi Soft five-fold. With the extra infusion of €170 million, they were able to then purchase Red Storm Entertainment in 2000, giving them access to the Tom Clancy's series of stealth and spy games, highly popular in the United States.^[6] Ubi Soft helped with Red Storm to continue to expand the series, bringing titles like Tom Clancy's Ghost Recon and Tom Clancy's Rainbow Six series.^[6] The company got a strong foothold in the United States when it worked with Microsoft to develop Tom Clancy's Splinter Cell, an Xbox-exclusive title released in 2002 to challenge the PlayStation-exclusive Metal Gear Solid series, by combining elements of Tom Clancy's series with elements of an in-house developed game called The Drift. Splinter Cell helped not only to sell the Xbox 360 console, but established both Ubi Soft and its Montreal studio as important players in the video game market.^[6]

In March 2001, Gores Technology Group sold The Learning Company's entertainment division (which includes games originally published by Brøderbund, Mattel Interactive, Mindscape and Strategic Simulations) to them. The sale included the rights to intellectual properties such as the Myst and Prince of Persia series.^[12] Ubisoft Montreal developed the Prince of Persia title into Prince of Persia: The Sands of Time, released in 2003, another critically successful title.^[6] At the same time, Ubi Soft also released Beyond Good & Evil, Ancel's project after Rayman; it was one of Ubi Soft's first commercial "flop", as while it has gained an appreciation over time, it was met with lukewarm reception at its release alongside a competitive 2003 release market.^[6]

Continued expansion (2003–2015)

On 9 September 2003, Ubi Soft announced that they would change their name to simply Ubisoft, and introduced a new logo known as "the swirl".^[13][14] In December 2004, rival gaming corporation Electronic Arts purchased a 19.9% stake in the firm. Ubisoft referred to the purchase as "hostile" on EA's part.^[15] Ubisoft's brothers recognized they had not considered themselves within a competitive market, and employees had feared that an EA takeover would drastically alter the environment within Ubisoft. EA's CEO at the time, John Riccitiello, assured Ubisoft the purchase was not meant as a hostile maneuver, and EA ended up selling the shares in 2010.^[6]

Ubisoft established another new IP, Assassin's Creed, first launched in 2007; Assassin's Creed was originally developed by Ubisoft Montreal as a sequel to Prince of Persia: The Sands of Time but instead transitioned to a story about Assassins and the Templar Knights.^[6] In July 2006, Ubisoft bought the Driver franchise from Atari for a sum of €19 million in cash for the franchise, technology rights, and most assets. In July 2008, Ubisoft made the acquisition of Hybride Technologies, a Piedmont-based studio renowned for its expertise in the creation of visual effects for cinema, television and advertising. In November 2008, Ubisoft acquired Massive Entertainment from Activision.^[16] In January 2013, Ubisoft acquired South Park: The Stick of Truth from THQ for $3.265 million.

Ubisoft announced plans in 2013 to invest $373 million into its Quebec operations over seven years, a move that is expected to generate 500 additional jobs in the province. The publisher is investing in the expansion of its motion capture technologies, and consolidating its online games operations and infrastructure in Montreal. By 2020, the company will employ more than 3,500 staff at its studios in Montreal and Quebec City.^[17]

In March 2015, the company set up a Consumer Relationship Centre in Newcastle-upon-Tyne. The centre is intended to integrate consumer support teams and community managers. Consumer Support and Community Management teams at the CRC are operational seven days a week.^[18]

Attempted takeover by Vivendi and present (2015–onward)

Since around 2015, the French mass media company Vivendi has been seeking to expand its media properties through acquisitions and other business deals. In addition to advertising firm Havas, Ubisoft was one of the first target properties identified by Vivendi, which as of September 2017 has an estimated valuation of $6.4 billion.^[19][20] Vivendi, in two separate actions during October 2015, bought shares in Ubisoft stock, giving them a 10.4% stake in Ubisoft, an action that Yves Guillemot considered "unwelcome" and feared a hostile takeover.^[21] In a presentation during the Electronic Entertainment Expo 2016, Yves Guillemot stressed the importance that Ubisoft remain an independent company to maintain its creative freedom.^[22] Vice-President of Live Operations, Anne Blondel-Jouin, expressed similar sentiment in an interview with PCGamesN, stating that Ubisoft's success was (partly) due to "...being super independent, being very autonomous."^[23][24]

Vivendi also acquired stake in mobile game publisher Gameloft, also owned by the Guillemots, at the same time it started acquiring Ubisoft shares.^[25][21] In the following February, Vivendi acquired €500 million worth of shares in Gameloft, gaining more than 30% of the shares and requiring the company under French law to make a public tender offer; this action enabled Vivendi to complete the hostile takeover of Gameloft by June 2016.^[26][27][28] Following Vivendi's actions with Gameloft in February 2016, the Guillemots asked for more Canadian investors in the following February to fend off a similar Vivendi takeover;^[29][30][31] by this point, Vivendi had increased their share in Ubisoft to 15%, exceeding the estimated 9% that the Guillemots owned.^[27][29] By mid-June 2016, Vivendi had increased its shares to 20.1%, but denied it was in the process of a takeover.^[32]

By the time of Ubisoft's annual board meeting in September 2016, Vivendi has gained 23% of the shares, while Guillemots were able to increase their voting share to 20%. A request was made at the board meeting to place Vivendi representatives on Ubisoft's board, given the size of their share holdings. The Guillemots argued strongly against this, reiterating that Vivendi should be seen as a competitor, and succeeded in swaying other voting members to deny any board seats to Vivendi.^[33]

Vivendi continued to buy shares in Ubisoft, approaching the 30% mark that could trigger a hostile takeover; as of December 2016, Vivendi held a 27.15% stake in Ubisoft.^[34]Reuters reported in April 2017 that Vivendi's takeover of Ubisoft would likely happen that year,^[19] and Bloomberg Businessweek observed that some of Vivendi's shares would reach the two-year holding mark, which would grant them double voting power, and would likely meet or exceed the 30% threshold.^[35] The Guillemot family has since raised their stake in Ubisoft; as of June 2017, the family now held 13.6 percent of Ubisoft's share capital, and 20.02 percent of the company's voting rights.^[36] In October 2017, Ubisoft announced it reached a deal with an "investment services provider" to help them purchase back 4 million shares by the end of the year, preventing others, specifically Vivendi, from buying these.^[37]

In the week just before Vivendi would gain double-voting rights for previously purchased shares, which would have likely pushed their ownership over 30%, the company, in quarterly results published in November 2017, that it has no plans to acquire Ubisoft for the next six months, nor will seek board positions due to the shares they hold during that time, and that it "will ensure that its interest in Ubisoft will not exceed the threshold of 30% through the doubling of its voting rights." Vivendi remained committed to expanding in the video game sector, identifying that their investment in Ubisoft could represent a capital gain of over 1 billion euros.^[38]

On 20 March 2018, Ubisoft and Vivendi struck a deal ending any potential takeover, with Vivendi agreeing to sell all of its shares, over 30 million, to other parties and agreeing to not buy any Ubisoft shares for five years. Some of those shares were sold to Tencent, which after the transaction held about 5.6 million shares of Ubisoft; the same day, Ubisoft announced a partnership with Tencent to help bring their games into the Chinese market.^[39] Vivendi affirmed it would completely divest its shares in Ubisoft by March 2019.^[40]

Subsidiaries

Current

Former

Games

Games as a service

Ubisoft noticed that connected sandbox experiences, with seamless switches between single and multiplayer modes provided the players with more fun, leading the company to switch from pursuing single-player only games to internet connected online experiences.^[76] According to Guillemot, Ubisoft internally refers to its reimagined self as 'before The Division' and an 'after The Division'.^[76]

In an interview with The Verge, Anne Blondel-Jouin, executive producer of The Crew turned vice-president of live operations,^[76][77] noted that The Crew was an early game of Ubisoft's to require a persistent internet connection in order to play.^[76] This raised initial concerns for gamers, hampering the game's initial success and sparked concerns internally at the company.^[76]

Technology

Uplay

Uplay is a digital distribution, digital rights management, multiplayer and communications service for PC created by Ubisoft. Ubisoft Club is a reward program connected ot Uplay Members earn rewards by completing certain actions while playing games published by Ubisoft. Completing an action gives you a certain number of Units, which members can use to unlock those rewards or to get a discount on games from the Uplay Store.

AnvilNext

AnvilNext, formerly named Scimitar, is a proprietary game engine developed wholly within Ubisoft Montreal in 2007 for the development of the first Assassin's Creed game, and since expanded and used for nearly all other Assassin's Creed titles and other Ubisoft games.

Dunia Engine

The Dunia Engine is a software fork of the CryEngine that was originally developed by Crytek, with modifications made by Ubisoft Montreal. The CryEngine was unique at the time as it could render large outdoor environmental spaces. Crytek had created a demo of their engine called X-Isle: Dinosaur Island which they had demonstrated at the Electronic Entertainment Expo 1999. Ubisoft saw the demo, and had Crytek build out the demo into a full title, becoming the first Far Cry, released in 2004.^[78] That same year, Electronic Arts established a deal with Crytek to build a wholly different title with an improved version of the CryEngine, leaving them unable to continue work on Far Cry.^[79] Ubisoft assigned Ubisoft Montreal to develop console versions of Far Cry, and arranging with Crytek to have all rights to the Far Cry series as well as a perpetual license on the CryEngine.^[80]

In developing Far Cry 2, Ubisoft Montreal modified the CryEngine to include destructable environments and a more realistic physics engine. This modified version became the Dunia Engine, which premiered with Far Cry 2 in 2008.^[81][82] The Dunia Engine continued to be improved, such as adding weather systems, and used of the basis of all future Far Cry games, as well as James Cameron's Avatar: The Game, also developed by Ubisoft Montreal.^[83][84] According to Remi Quenin, one of the engine's architect at Ubisoft Montreal, the state of the Dunia Engine as of 2017 includes "vegetation, fire simulation, destruction, vehicles, systemic AI, wildlife, weather, day/night cycles, [and] non linear storytelling" which are all fundamental elements of the Far Cry games, and little of the original CryEngine code remained in the current version.^[85]

Controversies

2000s

Ubisoft used the controversial "StarForce" copy protection technology which is able to install drivers on a system and is known to cause hardware and compatibility issues with certain operating systems. In April 2006, Ubisoft confirmed that they would stop using StarForce on their games, citing complaints from customers.^[86]

In the February 2008 issue of Electronic Gaming Monthly, editor-in-chief Dan "EGMShoe" Hsu asserted that Ubisoft had ceased to provide Ubisoft titles to EGM for coverage purposes as a result of prior critical previews and negative reviews.^[87][88] Yves Guillemot, the CEO of Ubisoft, was quoted in the company's third-quarter 2008–09 sales report as saying "as some of our games did not meet the required quality levels to achieve their full potential, they need more sales promotions than anticipated."^[89]

In August 2008, Ubisoft was criticised by the antiwar group Direct Action to Stop the War (DASW) for its role as a developer of propaganda and recruitment tools for the United States Department of Defense.^[90]

2010s

In January 2010, Ubisoft announced the online services platform Uplay, which requires customers to authenticate on the first game launch and to remain online continually while playing, with the game pausing if network connection is lost. This system prevent to play games offline, to resell them and in the case should Ubisoft's servers go down, games would be unplayable. In 2010, review versions of Assassin's Creed II and Settlers 7 for the PC contained this new DRM scheme and instead of pausing the game, it would discard all progress since the last checkpoint or save game.^[91] However, subsequent patches for Assassin's Creed II allowed players to continue playing once their connection has been restored without loss of progress.^[92]

In March 2010, outages to the Ubisoft DRM servers were reported, causing about 5% of legitimate buyers to be unable to play Assassin's Creed II and Silent Hunter 5.^[93][94] Ubisoft initially announced this was the result of the number of users attempting to access their servers to play, but later claimed that the real cause of the outages were denial-of-service attacks.^[93][94] In August 2011, Ubisoft released From Dust with DRM protection, contrary to previous statements that the game would not have any DRM related restrictions. After several months, the DRM had still not been removed from copies of the game.^[95]

The company's use of Aaron Priceman, also known as Mr. Caffeine by the internet, as a spokesman at Electronic Entertainment Expo 2011 was criticised for his reliance on popular internet references, inability to pronounce Tom Clancy (pronounced by Priceman as "Tom Culancy"), sexual innuendos and imitations of video game sound effects with little to no response from the audience.^[96]

In July 2013, Ubisoft announced a major breach in its network resulting in the potential exposure of up to 58 million accounts including usernames, email address and encrypted passwords. Although the firm denied any credit/debit card information could have been compromised, it issued directives to all registered users to change their account passwords and also recommended updating passwords on any other website or service where a same or similar password had been used.^[97] All the users who registered were emailed by the Ubisoft company about the breach and a password change request. Ubisoft promised to keep the information safe.^[98]

After revealing Assassin's Creed Unity at Electronic Entertainment Expo 2014, Ubisoft came in for criticism from the gaming community shortly after revealing that the game would not support female characters in co-op gameplay. The criticism was inflamed after they explained the absence of a female co-op or playable character in Far Cry 4: according to Ubisoft Montreal, they were close to making it possible when the decision was taken that they didn't have the right animations for a female character.^[99] Among the responses were comments from developers that the explanations given were not valid. Among them were the fact that the protagonists of Assassin's Creed III and its spin-off game Liberation shared a large number of movement animations. There were also statements that characters in video games tended to move in a similar fashion regardless of gender.^[100] An animation director for Assassin's Creed III also said that the stated reasons of workload and animation replacement didn't hold up, saying that it would be "a day or two's work" to create a female character model.^[99]

Lawsuits

• In 2008, Ubisoft sued Optical Experts Manufacturing (OEM), a DVD duplication company for $25 million plus damages for the leak and distribution of the PC version of Assassin's Creed. The lawsuit claims that OEM did not take proper measures to protect its product as stated in its contract with Ubisoft. The complaint also alleges that OEM admitted to all the problems in the complaint.^[101]


• In April 2012, Ubisoft was sued by the author of the book Link, John L. Beiswenger, who alleged a copyright infringement for using his ideas in the Assassin's Creed franchise and demanding $5.25 million in damages and wanted to stop the release of Assassin's Creed III that was set to be released in October 2012 along with any future games that allegedly contain his ideas.^[102] On 30 May 2012, Beiswenger dropped the lawsuit. Beiswenger was later quoted as saying he believes "authors should vigorously defend their rights in their creative works", and suggested that Ubisoft's motion to block future lawsuits from Beiswenger hints at their guilt.^[103]


• In December 2014, Ubisoft offered a free game from their catalogue of recently released titles to compensate the season pass owners of Assassin's Creed Unity due to its buggy launch. The terms offered with the free game revoked the user's right to sue Ubisoft for the buggy launch of the game.^[104]

References

External links

Wikimedia Commons has media related to Ubisoft.

• Official website