MONTREAL -- At some points in the game, the water looks real; clear at some angles to reveal the rocks below, at other angles, thick and murky. When your character hops into a helicopter, the exhaust fumes billow through the screen and seemingly into your face. The new game is called James Cameron’s AVATAR: The Game, based on Mr. Cameron’s movie of the same name, scheduled to come out next month.

Developed by Ubisoft Divertissements Inc., the Montreal subsidiary of the Paris-based video game giant, Ubisoft Entertainment SA, along with James Cameron’s production company Lighthouse Entertainment, Ubisoft has become the first company to develop a mainstream game using 3D technology.

Ubisoft has taken the lead in what is considered the future of the video game industry, and is one step closer to transforming itself from a video game developer to a “360 degree entertainment content provider,” said Yannis Mallat, CEO of the Montreal subsidiary.

“I don’t want to get into the pitfall of ‘blurring the lines’ between film and game,” said Mr. Mallat. “We’re trying to build capacity to tap into other entertainment experiences. The value lies on the way to get there.”

To stay ahead of the industry, Mr. Mallat said he is thinking about how Ubisoft will use the capability of future video game consoles to render images -- in real time -- as clear as those from a High Definition television program.

“That might mean [Ubisoft] releasing movies and video games at the same time,” he said. “Why not?”

Technically, Ubisoft already has.

After buying the Piedmont, Que.-based visual effects company, Hybride, in July 2008, Ubisoft created a three-part movie trailer for their blockbuster video game, Assassin’s Creed 2, and uploaded it to YouTube. Ubisoft became the first company in which video game developers were involved from beginning to end with a short film related to the game. Hybride employees worked on about 100 scenes in the movie Avatar, and have also worked on other major releases such as Sin City and 300.

Assassin’s Creed 2 came out mid-November and sold 1.6 million copies in its first weekend, and with Avatar coming out Dec. 1 and Splinter Cell Conviction at the end of February, Mr. Mallat said this was the most important quarter in the history of the company. Ubisoft is hoping the games sell well after revenues for the first half of 2009 fell by over 52% from a year ago because of fewer releases during the period. The company generates more than 1-billion euros annually.

Consumers shouldn’t think they can slide the Avatar game in, put on glasses and play it in 3D; a special TV that projects polarized light is required. The game has a non-3D mode for regular televisions.

But Mr. Mallat said Ubisoft wouldn’t have created the 3D game if it didn’t think many people would eventually want to buy the new type of TV.

“3D is to pictures what Dolby Stereo was to sound,” he said. “No one wants to go back to mono.”

Financial Post

gvaliante@nationalpost.com