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Square Enix Montreal is celebrating its 10th year as a mobile game studio focused on triple-A franchises.
The studio opened its doors in 2011 when mobile games were taking off on Android and iOS. And it produced some hit titles such as the Lara Craft Go and Hitman Go series games.
The studio has transitioned to free-to-play games, and it has quadrupled its team over the years. I spoke with Patrick Naud, who started the studio. We talked about the shifts happening in games and some of the studio’s best work. A lot of traditional game companies didn’t succeed nearly as well as Square Enix Montreal did in mobile games.
It’s one of a number of success stories in Montreal. KPMG did a study that revealed that between 2009 and 2019, employment in the city has increased on average by 8% every year in the video game industry and by 28% in visual effects. In 2021 alone, Montréal International worked with 12 gaming studios to establish or expand in Montréal for total investments leading to the creation of 1,677 new jobs over the next three years.
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Since 2016, Montréal International has helped with the realization of nearly 60 gaming and VFX projects (implementation or expansion) in Montréal. That amounts to $1.99 billion worth of investments. Between 2009 and 2019, the gaming and VFX industries in greater Montréal added on average 1,000 new jobs every year, according to KPMG.
Square Enix Montreal has 170 employees, and it is hiring. Here’s an edited transcript of our interview.
GamesBeat: What’s the main interest for you right now as far as topics?
Patrick Naud: For us, I’m thinking short term. We’re working to bring our first generation of free-to-play games to a global market. That’s been the bulk of our focus. Through this, we had our 10-year celebration. It’s fun times right now for Square Enix Montreal. We’re celebrating what we’ve done, but we’re also on the verge of kicking off our future.
GamesBeat: What kind of games have come out here? What have you been working on?
Naud: We’ve announced Hitman Sniper: The Shadows. Based on the success we had with Hitman Sniper, which we released in 2015 — it was a premium game back then. But all the learnings we’ve found to make it more of a service game, taking that knowledge and bringing it to the free-to-play space with The Shadows. And the second title we’ve announced is Space Invaders AR. How can we use amazing AR technology to celebrate this legendary Space Invaders IP? I can’t talk too much about that right now, but that’s also part of our big push for early next year.
GamesBeat: What general kind of game is that? What have you described about it so far?
Naud: The way I’d describe our games is that — the beauty of what we do, and very close to the DNA we have, is we’re making the games that we want to make. We’re making the games that we believe will work in the free-to-play space. Instead of taking the tailored approach of seeing what works in the market right now and doing more of the same, it’s finding out how we can craft new experiences on mobile that will become the next big thing, that will become the games that other developers might be strongly inspired to start cloning. Both games have completely different approaches to gameplay, but they’re still two games that we believe will have a massive impact on the mobile space.
GamesBeat: Have you talked about how well Hitman Sniper has done over time?
Naud: I don’t know exactly what we’ve communicated, but I’ll put it this way. By operating Hitman Sniper as a service game — we started by doing events. We would have Halloween, Christmas, Chinese New Year, Golden Week in Japan, and the fourth of July. These were the five events, must-see events in the game that we started to do. Just by doing this, we saw an upraise in the active users. We’d see a lot of churned users coming back, and it was a good opportunity to bring in new users.
This is how we learned free-to-play. It’s how we learned how to properly operate service games. We learned how to tailor offers to specific players, making sure all the players could stay in the game as long as possible by catering to their needs. That’s why year two for Hitman Sniper was better than year one, and year three was better than year two. That’s why we strongly believe in the fact that Hitman Sniper: The Shadows is going to be even more successful, because we’re taking all the learnings from Hitman Sniper without the ceiling we had from the design we’d wedded ourselves to with the first game.
GamesBeat: Did that game start with a premium option?
Naud: It was premium. All the initial games we worked on, whether it was Hitman Sniper or the Go series games, were and are still all premium games. You had to pay up front. But obviously by converting Sniper into a live service, we started doing more price promotions, lowering the price. We were doing a lot more revenue for it after that, and even ad revenue, than with the initial payments. The more we lowered the price, the more people bought it. We’ve talked about the fact that it was very much — lowering the price was worth it to bring in more users and more revenue after the initial sale.
GamesBeat: How long has the studio been doing mobile games now? How have you seen mobile change during this time?
Naud: We started the studio 10 years ago focused on the next-generation console Hitman. But we switched after — basically nine years ago we switched to mobile, because we were asked if we wanted to take that challenge, seeing how we could bring our great IP to the mobile world. By doing so, we learned mobile. We used all the DNA we had from our experience on consoles to make a new type of mobile experiences. The Go series and Hitman Sniper were the first games we released as a studio.
What changed the most, I feel, is the fact that mobile 10 years ago was still in its infancy. There was a lot more room to test new gameplay, to come up with something fresh, something new. People were still trying to find out how people played on mobile, how we could craft great experiences tailored to mobile. That was the focus. How do we make mobile as accessible as possible? How do we bring our IP to millions more users, because we’re on mobile now?
Right now the market has matured a lot. A lot fewer new types of experiences, a lot more of the same. The same three or four art directions, the same three or four gameplay loops, the same three or four metagames. They combine that so that right now — it’s super interesting to see that every time you see an ad for a game, you need to step back and think, “Did I already play this game, or is the art just familiar?” That’s why we’re keeping our focus on trying to craft fresh new games, games that will stand out in a very crowded market. That’s what we’re good at.
GamesBeat: How many people does the studio have now?
Naud: We’re 170-plus full-time employees around the studio. We also have a lot of external partners. We’re still growing. We probably have 20 or 25 open positions. We need a few more people to do the best free-to-play games that we can operate for years to come.
GamesBeat: Square Enix has added another mobile studio in London as well, right?
Naud: It’s my studio, yeah. I oversee everything mobile for Square Enix in the west. I’m head of studio, but I also oversee the mobile games and business for Square Enix outside of Japan. The London studio is our newest studio, currently working on Tomb Raider Reloaded. We’ve announced a partnership with Viacom around Avatar: The Last Airbender as well.
GamesBeat: Is that basically an extension of the Montreal studio, or is it its own studio?
Naud: It’s its own studio. The goal is that Montreal is focused on internal development. We craft our own games with our people. And then in London we try to find amazing partners around the globe to partner up on different genres, different types of games, different IP. We can say that Montreal is internal development and London is external development and publishing.
GamesBeat: What do you see continuing to change in mobile as far as different trends happening today?
Naud: We’ve seen in the past few years that there’s room for more and more core gamers on mobile. We see a new generation of players that are native mobile core players. Mobile is their primary device. We see a growth not only in numbers of players, but the types of games people are playing. If you look at the success of shooters on mobile in the last few years, esports genres that were mainly successful on the PC are now even bigger on mobile. If you look at games we’ve seen this year like Call of Duty Mobile or Genshin Impact, these massive triple-A console-like experiences can also perform well on mobile.
The future of cloud might bring us even more high-end experiences. It’s good for everyone. We’re happy to see that there are more mobile players, and mobile players are expecting more and more from us. They expect better and better experiences.
GamesBeat: There are different kinds of things that can change now. The Epic versus Apple lawsuit means that you may be able to promote outside the App Store more easily now. Do you see some opportunities coming from there?
Naud: We’re not there yet. We’re at a point where we’re working on our first generation of games. We’re on the verge of shipping our first free-to-play games with Hitman Sniper and Space Invaders. But at this point, Apple and Google are by far our best partners in bringing our games to the masses. We haven’t looked at how we can extend monetization further yet, hosting monetization ourselves.
GamesBeat: We’re seeing other changes happening around NFTs and play-to-earn, new trends that are being embraced by gaming startups, especially in mobile.
Naud: And I like these opportunities. We’ll see what will come out of it. But right now we’re focused on crafting games that will be accessible to players worldwide. That’s not yet the case with NFTs. There’s a lot of money to be made. There’s an amazing audience there. But that’s not the focus of our first generation of games. We’re still going to make games that are played by everyone around the world. That’s the joy of mobile, and that’s our focus for this first generation of games.
GamesBeat: It’s interesting to see the industry change still. That’s one of the exciting things about it. You never know exactly which technology is going to come along.
Naud: And that’s why I talk about how we need to focus on what we’re doing now. We know there will be something new in two years. The games we’re doing now are based on where we are now and where the industry is now. But it is exciting to think about that second generation of free-to-play titles. What will it be? How will the market evolve at that point? Right now, though, we’re focused on Hitman Sniper and Space Invaders. They’ve been in development for a few years now. We’re excited to bring these games to market and start operating them. We’ll operate them for years to come.
GamesBeat: How many games could you see yourselves supporting at the same time? Do you plan to move that upward?
Naud: We’ve mentioned that we have two games in development in London. We’ve announced two out of Montreal, and there might be more. But the goal with this first generation is to go out and market each of these games, catering to a different audience and a different genre, and learn from these games. We’ll see afterward what will be the focus of the next generation. Having at least four games in operation also gives us a lot of insights into different audiences and different markets.
GamesBeat: You’ll never run out of IP to bring into mobile, I’m sure.
Naud: We see that IP makes it sometimes more accessible to users. There’s so much content coming out on mobile every day. IP helps us stand out. It also helps us craft something that — it’s easy to tailor experiences based on IP. You can have amazing gameplay, but with the IP you can make it even more special.
I go back to our initial success with Hitman Go and Lara Croft Go. Both games were basically using the same mechanic, the same type of gameplay. Both worked because of the treatment of this gameplay, because of the respect we had for the IP and for the fans. I can see how we can do that with many other IP and many other types of gameplay.
GamesBeat: What sort of markets around the world are good for you?
Naud: That’s the fun thing about mobile. It’s global. Just looking at the numbers we had for Hitman Sniper, we’re still making — I think it was 35 to 40 percent of our revenue that was coming from China, Korea, and Japan. We saw another 25 percent from the U.S., and then we had Europe and the rest of the world. That’s the joy of mobile. Our games are available to players everywhere. With the growth of these mobile players and mobile markets globally, it’s a fun time to be doing mobile games. Not only are people looking for great experiences, but there are many, many more of those people. It’s exciting to release a game in the mobile space right now. You have hundreds of millions of potential users.
GamesBeat: As far as the things that help you do this, how much of the functions are all internal at Square Enix? Things like user acquisition, mobile marketing, monetization. Are you using outside vendors, or do you pretty much do all that yourselves?
Naud: We do all that ourselves. We’ve built our own backend infrastructure, our own processes. We have a few partners in our tech stack. It’s not only our technology. But no, we’re self-sufficient. We have our own user research team that’s focused on mobile players. We have our own brand marketing teams that are building all of our campaigns, all of our messaging, all of our assets. We have our own internal user acquisition teams that try to find the best players in the mobile ecosystem.
But at the core, our key focus is still to make games that will stand up, games that will market themselves. When we talk about all these games looking alike, it’s hard to stand out in a very crowded mobile market. By making games that look and feel different, we believe that these games will perform even better on the marketing side.
GamesBeat: As far as hardware technology is concerned — the latest iPhones, the latest GPUs — are there some things that look interesting to you?
Naud: Part of our challenge is the fact that we want to support the latest tech — the iPhone 13 and all the power that’s available there, things like that — but at the same time, we want to make sure that the people who have an iPhone 8 can have a great experience with our game as well. How do we tailor experiences so that we can up-res it to the most powerful devices, but people with an older phone will still have a smooth experience? It’s always a drawback. How much can we push while still making sure that we make a game that’s accessible to as many millions of users as possible?
GamesBeat: Do you feel like gamers, especially the hardcore players, have made their peace with free-to-play monetization?
Naud: It depends on how you define “gamers.” People playing League of Legends or Hearthstone or PUBG on mobile or Fortnite, are they gamers? When I look at the mobile market today, I see the success of massive free-to-play games like — you have Arena of Valor or Free Fire or Call of Duty or Genshin Impact. These games are being played by tens of millions, maybe hundreds of millions of users. These are console-like core games that are played by core players on mobile. We know that there are more and more core mobile players every year. For more and more people, mobile is their core device.
I’m not afraid of that, because it’s still growing, growing every year. I highly encourage everyone to build core games, because there’s a massive amount of players looking for great core experiences on mobile.
GamesBeat: We’re seeing some interesting new tech for location games, 3D locations. Does that look appealing, to have things like vertical location in games?
Naud: It’s not something — again, as I said, we’re focusing on crafting great gameplay. It’s not technology that we’re looking at when we build our current generation of games. Maybe in the future, but not in the short term.
GamesBeat: Are you working in the office yet, or still remotely?
Naud: We’re still almost all working remotely. Our office is open, so we always have people working from the office. Anyone who wants to go to the office can go to the office. We’re starting to do what we call collaboration day, where we bring a full team to the office, but it’s not mandatory. If people want to connect remotely to these meetings, they can still work remotely. Overall we’re finding new ways to work in this day and age. I don’t foresee that we’ll come back five days a week to the office, but I don’t foresee that we’ll be 100 percent remote either. We just need to find a good middle ground that works for our employees. That’s the most important thing.
GamesBeat: Are you able to hire from around the world now?
Naud: Yeah, we’re bringing people from all over the world. But it’s still going to be a lot easier to bring in people that are local. They’re the ones that know us best. They know the values of the company, the types of games that we make. We already have people from all over the world, and that’s still going to be a trend going forward. With our market being global, we need to bring in that insight, that diversity in our people, so that they can represent a wider range of our players.
GamesBeat: Is there a different way of operating that you’ve learned over the last year and a half, running games through remote development?
Naud: We’ve learned to be transparent. I’m very open about it. We struggled, because we were a smaller team. We were a lot more organic, a lot less structured prior to sending everyone home. We had to learn. We didn’t have a lot of managers. Now, the weight of coordinating and organizing all these permutations falls back on the managers. They’re the ones who have had to adapt the most. We’re still in a good place. We’ve learned from it. We’ve adapted the way we work. But it wasn’t an easy transition.
We’re in a creative field. We’re crafting new experiences. It’s not a recipe that we can adapt every time. It’s a brand new recipe that we need to build. When we’re building these recipes, there are so many outputs from everyone that come into building and crafting a game. By removing all the social and informal and organic discussions, we felt that we lacked these creative discussions that helped our games become even better, and more quickly. It takes longer right now. We need to organize all these discussions and this information flow.
GamesBeat: It feels like there haven’t been a lot of successes from companies that made the transition from PC and console to mobile. What were some of the biggest lessons of that for you?
Naud: The great thing is that Square Enix as a whole acknowledges that it requires a different DNA to make mobile free-to-play games than it takes to make console premium titles. That’s why they let us organize and structure mobile the way we saw fit. We believed that we would be able to make this work in the long run. It took us a lot longer to convert from premium to free-to-play because of all the learning we had to do, but everyone realized that this is what we needed to do.
We couldn’t force it. We had the potential for success with our first generation of games. If we had forced it and released everything two years ago, we were not ready. We were not there yet. That’s why we’re on the verge of going live with our first games now. That’s what we needed. We needed that time. Square Enix was an amazing partner in this.
GamesBeat: What is Montreal like these days when it comes to the ability to attract people?
Naud: Well, it’s cold! That’s an issue. People are afraid of Montreal. But no, it’s an amazing hub. We attract people, but there’s such competition right now in Montreal with all the new studios coming over. With the amount of talent that we have, it’s brought a lot of competition. A lot of studios have opened up. It feels like at least once a month for the past 12 months I’ve seen someone new open up shop.
We’re fortunate, because it showcases the talent we have here, but at the same time it’s also a challenge. It’s harder and harder to compete for people. That’s why we’ve focused on crafting an amazing work environment. Our employees are evangelists. That’s the best way for us to bring new developers, through our evangelists bringing people that they know will fit within our culture. That’s been pretty successful. We’re still looking for a lot of new people, but that’s been successful as far as bringing us the right people.
GamesBeat: Do you feel like most of the people who came on board with you — were they mobile veterans, or were they more console and PC hardcore game veterans?
Naud: When we initially went into mobile, it was all console guys that wanted to try the mobile experience. What could they craft in mobile? How could they take all the learning they had from high-end console and bring that to mobile? How could we craft this new kind of experience? Nowadays we’re bringing a good mix of core console developers that believe in mobile, that want to experience what it is to craft these games with a smaller team where you have a lot more insight on what the game is going to be, and then more mobile native developers that have done it before. They’re bringing the expertise that is also necessary to operate live titles.
The last 10 years, it’s been an amazing experience. Learning after learning after learning. It’s exciting to see where we are today. It’s exciting to look back, reflect on where we were, and think about how these 10 years went really quick. The next 10 will be extraordinary. It’ll likely be as intense as the past 10.