Create value beyond the famous Quebec talent

Montreal is one of the main video game hubs in the world. Multinationals and investors constantly praise the quality of Quebec’s workforce when they announce investments in the province. By selling his studio to a Californian publisher for US $ 165 million earlier this week, Alexandre Thabet, founder and CEO of Ludia, recalled the importance, for a sustainable economic ecosystem, of seeing to- beyond the number of jobs.

Alexandre Thabet himself made his debut in the video game sector at the Montreal studio of Ubisoft, which very early on took advantage of significant government salary assistance to establish himself as a pillar of Quebec video games. The experience acquired with the French giant then enabled it to open its own studio, Ludia, which quickly attracted foreign investment, but which will have retained its place in the Montreal industry.

Sell ​​to a foreign company

When an entrepreneur sells his business, it’s usually the end of a chapter, if not the end of the story altogether. This was not the case for Alexandre Thabet in 2010, when Fremantle Media took a majority stake in his company. This will not be the case again this time, he says, even if the fact of coming under the Californian fold marks a pivotal moment for Ludia. The big Montreal boss intends to stay in office and believes that joining a bigger foreign company is a good way to access the next level of growth for the Montreal studio.

“In today’s video game market, you have to be a big player to be able to sit at the negotiating table with other entertainment giants. Ludia has diversified a lot over the past ten years, and we have become closer to American film producers. Jam City has a market presence five times larger than ours, and that will help us continue to grow. The next games that we plan to launch within three years have tremendous commercial potential and are perhaps the most important in our history. “

Whether or not to develop own brands

Ludia has been successful by leveraging very popular brands owned by other companies: Jurassic World, The Price Is Right, etc. This approach has also been adopted with similar success by other independent Quebec studios. In contrast, the series of games Assassin’s Creed produced by Ubisoft is closely associated with its Quebec studios. Both approaches have their merits, but launching a whole new intellectual property in 2021 is not as straightforward as it was ten or twenty years ago, says Thabet.

“The risk of investing in a brand new brand in 2021 is higher than before. The video game industry has matured, and it must cost at least ten times as much to introduce new titles. Ubisoft is currently betting on brands that were created at a time when it was much cheaper to do so. Today, a large publisher must at least reduce the risk by having well-known brands in their catalog alongside their own brands. “

Netflix and video games

Beyond the introduction of new consoles and the emergence of new forms of video games, such as virtual reality, it is above all the arrival of new unlimited video game services, such as Apple Arcade and Google Stadia, which is the sign of an important change in the industry. The creation within Netflix’s senior management of a position of vice president for video games suggests that the subscription model that has revolutionized cinema and music could in turn disrupt video games. But the bet is not won in advance, believes the founder of Ludia.

“The subscription model certainly has its purpose. We feel that this Netflix-style model will gain in importance over the next few years. Except that the way people “consume” video games is very different from the way we listen to music or watch movies. Players will adopt very specific games and will come back regularly for years to come. They don’t need to subscribe to a catalog of dozens of titles to spend hours playing. Combining several games in the same bouquet is not the best formula for them. The way most gamers behave leads me to believe that services like Apple’s and Netflix’s won’t take up as much space as we think. “

The consolidated video game

The video game industry has aged rapidly and is now considered “mature” by specialists. You only have to take a look at how companies in the sector are growing these days to see it: for the past few years we have seen a consolidation through acquisitions which shows a need for the big players to absorb their investments. rivals to gain market share. This movement would not be about to end …

“We have seen this in recent years with the emergence of companies like Zynga. Electronic Arts has also been a great consolidator for a long time. This is now the approach taken by Jam City, ”says Alexandre Thabet. “I believe this trend will continue. For a company like Ludia, it was essential to find an important partner quickly enough to be part of this consolidation movement sooner rather than later, and thus to be among the first to benefit from it later. When we get together, we become bigger and we can then sit down more easily at the table of the great to continue to negotiate and develop new business opportunities. “

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