Ubisoft CEO Bets on Cloud and AI to Stay Ahead of Vivendi Threat

Ubisoft, the French video-game company that’s racked up the fifth-best performance among Stoxx 600 members this year, has a plan to keep revenue and profit growing if it can maintain its independence from French media giant Vivendi, according to Bloomberg.

The industry will expand at a rate of 15 percent to 20 percent over the next several years, CEO Yves Guillemot said in an interview ahead of the company’s annual meeting. To capture its share, the French video-game company plans to accelerate a push into new technologies such as cloud-based gaming and expand in promising Asian markets.

Guillemot, 57, squirmed out of Bollore’s grip before last year’s AGM by persuading shareholders that Ubisoft was more valuable on its own. He’s delivered, with the stock up 70 percent in 12 months and annual sales projected to rise 18 percent. But with Vivendi still on the prowl and poised to gain added voting rights in November, investor support is even more crucial now. Guillemot argues that ties to Vivendi would snuff out opportunities, not increase them.

"A videogame company cannot grow within a media conglomerate," Guillemot said, citing Walt Disney’s failed expansion. "In our industry, independence is needed to take risks, to be innovative. That is not compatible with Vivendi’s way of operating." Guillemot, who co-founded Ubisoft in 1986, expects future growth will come from further changes in technology, such as cloud gaming, artificial intelligence, machine learning, virtual reality and augmented reality

In addition, Ubisoft is targeting geographical expansion, Guillemot said. The company’s goal is to take advantage of new markets, such as Asia or Russia, that it isn’t yet covering very well. Gaming growth is huge in Asia, especially in China, where mobile games are booming. Ubisoft has increased its efforts in mobile gaming since Vivendi took over another family-led company, Gameloft, which focused on mobile games. Ubisoft expects China to become its second-largest market, up from its current sixth ranking.