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Ubisoft: it's riskier to be a game company than an entertainment company

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Ubisoft hasn't been shy in its attempts to expand its business beyond video games.

There's the Rabbids cartoon series, which is now a popular Saturday morning program for kids in the US and in Europe. There's the upcoming Rabbids interactive TV series, which will launch in North America in the fall. There's an Assassin's Creed movie currently in development, and a Watch Dogs movie deal was announced before the game even shipped. Ubisoft wants to be an entertainment company, says Ubisoft's SVP of sales and marketing Tony Key, because it's a lot less risky than just being a game company.

"Right now we're still primarily a game company – we want to become an entertainment company, and we don't just want to do that because we want to do that," he told Polygon. "It's important for us as a company to grow, and to grow our key game brands into other areas. So when you're creating a new franchise, you're thinking about how you can expand that into other areas. It's important for us to know that these things are expandable beyond just the games themselves."

Key said game development is getting more and more expensive, but video games themselves continue to sell at same price they've been sold for years. In order to make up the amount spent on development, publishers either have to expand their audience through more game sales or through other media. In the case of Ubisoft, the company is using the latter to achieve the former, and vice versa. Key used the Rabbids cartoon series as an example. Rabbids started as a video game brand for Ubisoft before being spun off into a cartoon series. The cartoon picked up steam in both Europe and the US, becoming a successful Saturday morning cartoon, which increased awareness and interest in the Rabbids video games.

"So it ended up coming full circle, where the transmedia is actually going to help grow the game," Key said.

When asked whether Ubisoft was taking a risk in attempting to be an entertainment company when its background is mainly in game development, Key said it's risky to be a big game company to begin with. "You need to create big, successful game brands if you're going to survive, and we've seen that it's not possible all the time to do that," he said. "We've had our share of less-than-stellar results as other publishers have, so really, the risk for us is not being successful in the core business."

Key said it's less risky to expand from its core business with movie studios and brand licensing, because it allows the company to reach a broader audience. Relying solely on its game-making business is the biggest risk.

"The first thing we consider [when green lighting a game] is can we make this a big, successful game?" he said. "And then we go and try to expand it from there."