October 11, 2007 -- Ubisoft, one of the world's largest video game publishers is to open a new game development studio in Chengdu. The new studio will be located in Chengdu's Hi-tech Zone. It is currently under construction, and will be officially opened in January 2008.

Ubisoft has one studio in Shanghai, which contributes to the company's international titles. Ubisoft operations in Chengdu will initially focus on internal outsourcing, but eventually it is planned that it will become an independent development center.

"A new team needs two to three year's time to be fully formed. When the timing is right, Ubisoft Chengdu will do research and development independently," Baozheng Wang, Ubisoft's PR manager told Emerging China.

Wang said that opening a studio in Chengdu is a response to the demands of the market.

"Ubisoft will make adjustments according to changes in the market. We still need couple years to wait for the Chengdu studio to mature. Before that time, we are not going set any strategic plans on the Chengdu studio."

"If the Chengdu studio is tasked with developing only games for China, then it could mean that Ubisoft is increasing its domestic efforts. However, the studio could just be doing more of the same as what the Shanghai studio does for international titles, Lisa Hanson, of US research company, Niko Partners, told Emerging China.

Hanson said that Ubisoft's new studio will not have much of an effect on its domestic competitors, since Ubisoft does not have a large share of the Chinese market. It is a market that is dominated by online role-playing games, and neither Ubisoft nor its rivals, such as Electronic Arts, are currently producing this kind of game in China.

Wang said that Ubisoft chose Chengdu not because the lower labor cost, but because Chengdu has made itself open to foreign investment from companies that employ an educated workforce.

"We believe that Chengdu has already established itself as a development center and that it will continue to grow in that regard, which in turn will bring more game industry companies to the western part of China." said Hanson, "There has been tremendous growth in development, talent and demand from China's 44 million gamers. We forecast continued growth at least until 2011, so to fulfill the domestic demand we are confident that Chengdu and other cities will benefit from new game companies and existing game companies opening studios and other operations there."