Guillemot Corporation

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Guillemot Corporation

Place de L’Etoile
56910 Carentoir
France
Telephone: (+ 33)2 99 08 08 80
Fax: (+ 33)2 99 08
Web site: http://www.guillemot.com

Public Company
Incorporated: 1984 as Guillemot Informatique
Employees: 1,500
Sales: EUR 222.31 million ($205 million)(2000)
Stock Exchanges: Euronext Paris
Ticker Symbol: 6672
NAIC: 334119 Other Computer Peripheral Equipment Manufacturing

Brittany, France-based, Guillemot Corporation has taken the fast track toward becoming one of the world’s premier producers of peripherals, hardware, and other accessories for the computer and console gaming markets. The company produces graphics cards and graphics accelerators, sound cards, DVD and CD-ROM drives, television acquisition cards, joysticks, gamepads, steering wheels, and other devices under the Guillemot, Maxi Sound, Thrustmaster, and Hercules brand names. Led by the five Guillemot brothers—Claude, Christian, Yves, Michel, and Gerard—who also founded and continue to operate video game specialist Ubi Soft Entertainment S.A., Guillemot Corporation has grown quickly at the turn of the century through its often innovative, feature-packed, and aggressively priced products. Although the Guillemot name has become well-known in France and the rest of Europe, Guillemot is known to North Americans especially through its acquisitions of well-respected brand names Thrustmaster and Hercules, both acquired in 1999. The company operates sales and marketing subsidiaries in 14 countries worldwide, two research and development centers in Canada and France, and six logistics facilities supporting its core European, Asian, and North American markets. The company’s North American headquarters are located in Montreal. Guillemot has been traded on the Euronext Paris fast-growth Nouveau Marché since its initial public offering was made in 1998. The company topped the FFr 1 billion mark in 2000—worth more than EUR 220 million. Guillemot has its goals set on gaining a position among the top five gaming hardware and accessories companies by the year 2003.

Startup in the Family Barn in the 1980s

The Guillemot family’s origins in commerce traced back to the beginning of the 20th century, when the family operated a cider distillery in its Carentoir, Brittany home. The family’s cider sales led the Guillemot into wholesale sales of apples, and by the 1930s, the family had built up a strong export trade in Germany. Later, in 1958, Yvette and Marcel Guillemot set up a new business as a wholesale agricultural products distributor, while raising their children, including their five sons, Michel, Claude, Yves, Christian, and Gerard, all of whom worked part-time in the family business while completing their studies.

By the early 1980s, the Guillemot brothers were graduating from school and beginning to look forward to establishing their own professional careers. The family’s agricultural products business had been successful, producing sales of some FFr 17 million per year, and the Guillemot’s parents agreed to provide backing for their sons to begin their own business.

By then, Michel Guillemot, who had completed his university studies in Lille, had already led his brothers into an interest in a still-emerging new industry, computers. Michel had already been behind the founding of the Microtel computer clubs that for a time helped introduce much of France to the new technology. Back at Carentoir, Michel, joined by brother Claude and then the remaining three Guillemot brothers, was given the go-ahead from father Marcel to launch the family into the computer industry.

The Guillemots started out in retail, opening their first Guillemot Informatique store near their home in 1984, but quickly focused on mail-order and wholesale distribution wing as well. The company’s early arrival gave Guillemot a head start and by their second year of business, the company had won contracts to supply computers and equipment throughout much of the French national school system. Although the growing company remained interested in the general computer market, the young Guillemot brothers were quickly captivated by the new and growing market for video computer games, which itself had only recently come into being with the launch of the Commodore and Atari computer-based gaming systems. Meanwhile, its growing success caused it to drop its mail-order component and focus on its blossoming wholesale distribution operations.

Yet many of the new games proved impossible to find in France. The Guillemots recognized the opportunity and began importing the elusive titles, including such early hits as “SOS Ghosts” and others. The company now featured strong software and hardware distribution, which, by 1986, was producing FFr 40 million in sales. An important breakthrough for the Guillemots came with contracts from French retail leaders Auchan, Carrefour, and others to supply these nationally operating chains of hypermarkets with computer hardware and software products. At the point, the company changed its name to Guillemot International.

The “international” part of its name was quickly developed as the company extended its distribution activities into other parts of Europe. The company expanded rapidly and in 1986 separated its two lines of activities, hardware and software, into two companies with the creation of Ubi Soft Entertainment S.A. While that company was headquartered in Paris, Guillemot International itself remained in the family’s native Carentoir.

Ubi Soft quickly imposed itself as a major distributor of computer and video games and later as one of the world’s leading developers and publishers of video games. In 1988, the Guillemot brothers sought to make their mark on the hardware side of things as well and began to introduce the company’s own computer peripheral designs. In 1990, the company launched its first line of products bearing the Guillemot brand name. At the same time, Guillemot began acting as exclusive French distributor for Soundblaster—which was quickly establishing itself as the computer industry standard in sound cards—and Thrustmaster, the first company to create joysticks for the computer game market.

Soundblaster, Thrustmaster, and other companies, such as graphics-card maker Hercules, were in the process of transforming the computer from a silent, sober, work-oriented piece of equipment into a full-fledged entertainment center—where one just happened to work sometimes. Although the computer gaming market remained somewhat restrained through the first half of the decade, the arrival of new technologies, such as CD-ROM drives, 3D graphics accelerators, 16-bit stereo sound cards and other peripherals, as well as the launch of new generations of video gaming consoles from Sega and Nintendo were set to launch the gaming segment into a full-fledged entertainment industry and rival to the television and motion picture industries. Guillemot positioned itself to be at the forefront of this development, extending the company’s operations beyond France by opening a series of foreign sales offices. Between 1994 and 1996, Guillemot opened offices in Belgium, Germany, United Kingdom, Switzerland, the United States, Canada, and Hong Kong.

The company’s interests were also turning more and more toward the development of its own hardware. By the mid-1990s, the company’s brands included its Fun Access and Access Line accessories products, and also the Maxi brand of hardware and peripherals, including gamepads and other devices. Among the early Maxi products were the first of the company’s Maxi Sound line of sound cards. The development of these cards caused the company to end its distribution arrangement with Soundblaster—and Guillemot proceeded to become one of Soundblaster’s strongest competitors.

Gunning for the Top in the 21st Century

If Guillemot’s early products had often seemed little more than clones of rival products, in the mid-1990s the company stepped up its research and development and determined to make establish its name as a product innovator. A breakthrough for Guillemot came in 1996 with its release of the Maxi Sound 64 sound card, the first card on the market featuring 64-voiced polyphony. The following year, the company extended the Maxi Sound 64 range with the release of the Home Studio Pro version, the first all-in-one computer-based solution for music creation and recording accessible to a large public. At the same time, the Home Studio Pro offered cutting-edge technologies for the gaming market, including one of the first attempts at introducing 3D positional sound to computer games.

Through the middle years of the decade, Guillemot extended its range to include a wide variety of peripherals for both the computer and console markets. The company was now placing its various brand names on steering wheels, joystick and game pads, CD-ROM drives, digital video acquisition boards, speaker systems, and other products.

With Ubi Soft making steady games in the ranks of games developers—driven by the worldwide success of the Rayman games series—the Guillemot brothers sought to raise their hardware operations to its own leadership positions. The company restructured in 1997, then renamed itself Guillemot Corporation in 1998, when it took a listing on the Paris Stock Exchange high-growth Nouveau Marché. The company now began to phase out the Maxi and Maxi Sound and other brand names in favor of the Guillemot name itself.

After establishing itself as a major player in the worldwide soundcard market, Guillemot also extended itself into the booming—and still more competitive—market for graphics cards, releasing its own board designs based on technologies developed by 3DFX, NVIDIA, and others. Until its public offering, Guillemot had focused on its European community market, where it succeeded in boosting itself to one of the top hardware and peripherals manufacturers.

Company Perspectives:

Guillemot is committed to being the top producer of exciting accessories and hardware for gamers and to be among the top five gaming hardware and accessories manufacturers worldwide by 2003.

In 1998, Guillemot Corporation determined to take on the far larger North American market. The company opened its headquarters on that continent in bilingual Montreal, where it also established a second research and development facility. That unit, opened in 1999, was also slated to become the growing group’s principal R&D center as Guillemot poised to begin a new and more aggressive expansion phase. Yet Guillemot’s North American expansion seemed hampered by its lack of a strong brand name in that market—and even the difficulty many English speakers experienced when trying to pronounce the company’s name.

Guillemot (pronounced as “gee-ye-moe”) raised new capital in 1999 and quite a few eyebrows when, within the space of ñve months, it made two important acquisitions. The first of these came in July 1999, when Guillemot paid $15 million to acquire the gaming peripherals operations and brand name from Thrustmaster, of Oregon (the remaining operation subsequently renamed itself).

One of the leading names in gaming and simulation hardware, Thrustmaster had been founded in 1990 and had been the first company to produce a realistic joystick, the Mark I Weapons Control System, released in 1991. Thrustmaster continued to improve its technology, releasing its Pro Flight Control System in 1992, the F-16 and F-22 joystick—foot pedal units. In the mid-1990s, Thrustmaster turned its simulation expertise to the popular racing game market, releasing Formula Tl Driving Controls. Thrustmaster quickly became a leading name in game controls, and the company’s sales grew to $15 million by 1995 and then to $25 million by 1998.

Guillemot began phasing out its own branded line of controls in favor of the Thrustmaster name. The company next began looking for an acquisition to help it gain similar recognition among the intensely competitive graphics market. A new opportunity presented itself in August 1999 when Hercules Computer Technology filed for bankruptcy protection.

The company had been a pioneer in the computer graphics market. At the beginning of the 1980s, Van Suwannukul, a native of Thailand and then resident of the town of Hercules, California, had been preparing his doctoral thesis but was unable to display the Thai alphabet on the text-based, monochrome displays available at the time. Suwannukul developed his own display system, an add-on board that allowed for both graphics and text to be displayed. In 1982, Suwannukul formed Hercules Computer Technology in his garage and launched the first Hercules graphics display board.

The launch of the Hercules coincided with the release of the first version of the popular spreadsheet program Lotus 1-2-3. Built for the IBM PC platform, the Hercules card quickly established itself as an industry standard—and in turn helped the IBM platform replace all but the Apple as a computer standard. Throughout the 1980s and early 1990s, Hercules was able to command high prices for its graphics cards. Yet by the mid-1990s, the increasing power of CPUs and the appearance of faster rival technologies, doomed Hercules to a steady decline. Nonetheless, the Hercules brand name remained one of the industry’s best known and most highly respected.

Guillemot acquired the Hercules brand name and quickly added it to its own line of graphics cards, themselves now based around the cutting-edge graphics processors developed by NVIDIA. Guillemot and NVIDIA had signed a strategic partnership agreement early in 1999. Other partnerships followed, including an agreement with Ferrari to add the famed carmaker’s name and logo to the company’s driving simulators. The following year, the company launched its own investment vehicle, Guillemot Ventures, and joined with the newly formed Ubi Ventures subsidiary of Ubi Soft to begin making venture capital investments. The two companies joined in the creation of the online gaming start-up www.Gameloft.com, and also in the creation of Ludi Wap, a company dedicated to providing online gaming content for the new generation of Internet-capable mobile phones.

Guillemot continued extending its infrastructure, opening new subsidiaries in Japan, Italy, Australia, and the Czech Republic into 2001. Guillemot also stepped up its product development, releasing new and highly acclaimed Hercules-branded graphics cards and signing a licensing agreement with Microsoft to develop peripheral products for the highly awaited Xbox gaming console to be launched in 2001. As Guillemot’s sales topped the FFr 1 billion mark in its 2000 year, the company now set its sights on taking a spot in the top five gaming hardware and accessories companies by the year 2003. With its strong Thrustmaster and Hercules brand names, as well as the continuing growth of the Guillemot name, the company seemed likely to remain in high gear for a long time to come.

Key Dates:

1984:: Guillemot Informatique is founded.
1986:: The company name changes to Guillemot International.
1988:: Guillemot begins manufacturing hardware and accessories.
1994:: The company begins international expansion and launches the Maxi brand name.
1997:: The company Releases Maxi Sound 64 sound card.
1998:: The company changes its name to Guillemot Corporation, with a public listing on Paris stock exchange.
1999:: Guillemot acquires Thrustmaster and Hercules.
2000:: The company opens new subsidiaries in Japan, Australia, the Czech Republic, and Italy.
2001:: Guillemot signs a licensing agreement for Microsoft Xbox.

Principal Subsidiaries

Guillemot BV (Netherlands); Guillemot Conditionnement SARL; Guillemot Conditionnement France SARL; Guillemot Participations SA; Guillemot France SA; Guillemot GmbH (Germany); Guillemot Logistique SARL; Guillemot Logistique Inc. (Canada); Guillemot Logistik GmbH (Germany); Guillemot Logistique France; Guillemot Logistics Ltd (Hong Kong); Guillemot Logistica SL (Spain); Guillemot Logistic Ltd (U.K.); Guillemot Ltd (U.K.); Guillemot Ltd (Hong Kong); Guillemot Manufacturing Ltd (U.K.); Guillemot SA (Spain); Guillemot SA (Belgium); Guillemot Online.com, Inc. (U.S.); Guillemot, Inc. (U.S.); Guillemot, Inc. (Canada); Guillemot Recherche et Développement SARL; Guillemot Recherche et Développement, Inc.; Guillemot Studio Graphique SARL; Guillemot Support Technique SARL (Canada); Hercules Technologies SA; Hercules Technologies, Inc.; (U.S.); Logicosoftware SA (Switzerland); Thrustmaster SA; Thrustmaster, Inc. (U.S.).

Principal Competitors

ATI Technologies, Inc.; Creative Technology Ltd.; Diamond Multimedia Inc.; Elsa AG; Hauppauge Inc.; Logitech SA; Matrox Graphics; Terratec AG; Trust SA.