MONTREAL - Video game maker Ubisoft is positioning itself to offer more games that have cinema-quality special effects and movie-like experiences with the acquisition of Quebec-based Hybride Technologies.

Hybride Technologies is known for its work on the films "300," Frank Miller's "Sin City," Eric Brevig's "Journey to the Center of the Earth," and the "Spy Kids" series.

French-based Ubisoft, which employs 1,800 people in Quebec and has more than half its global video game production workforce in the province, announced the acquisition of the 80-employee company on Tuesday at its Montreal headquarters.

Tuesday's transaction reflects the rapid growth in the Canadian video game industry, with two dominant players, Ubisoft and Electronic Arts (Nasdaq:ERTS), the U.S. company whose Canadian subsidiary employs nearly 1,300 people in Vancouver.

In Montreal, CEO Yannis Mallat said it's a new step in Ubisoft's media strategy and Hybride will lend its cinematic eye to video games.

"They can bring their eye in terms of how they see, how they picture the graphic quality," said Mallat, who is the head of Ubisoft's Montreal studio.

"They are so well known within the Hollywood world," Mallat said after a news conference. "They will bring those bridges to that world that we need to learn. We hope to learn lots and together create a new medium experience."

The acquisition comes as video game publishers and Hollywood get closer.

Some reviewers of the movie "Beowulf," which came out last November, noted its resemblance to a long video game scene and that the trend of convergence between movies and video games would likely continue.

Ubisoft, one of the world's largest video game publishers, hasn't announced how much it will pay for the Quebec company. But Ubisoft said the acquisition is expected to initially generate the equivalent of about $10 million to $11 million in annual sales.

Among Ubisoft's game titles are "Assassin's Creed" for the Xbox 360 and PlayStation 3 and several best-selling games based on the Tom Clancy spy thriller novel "Splinter Cell," as well as the "Prince of Persia" series.

Hybride co-founder Pierre Raymond told the news conference the acquisition shows how the cinematic and video game worlds have been moving together.

Raymond said the acquisition will push limits and create new styles and products.

It will create results from "what seems to be two different worlds when in reality, fortunately, they were moving in the same direction," he said.

Ubisoft and Hybride said they hope to create one of the best 3D animation studios in the entertainment industry. Hybride also will continue to work with its film partners.

Mallat acknowledged Hybride as the best in its field and called the acquisition unique in the digital entertainment industry, but also necessary.

He said the technology isn't yet where it needs to be to provide the highest quality multimedia experience for gamers but added Hybride will help enhance it.

"It's the first time ever in the industry that we, as visionaries, we identify that this convergence isn't just a word and needs to happen," Mallat said.

Video game analyst Sam Kennedy of 1UP.com said Ubisoft, particularly its Montreal studio, is known for its "cinematic" video games.

"A lot of their titles have been kind of leading the way in the games industry in terms of their cinematic nature," Kennedy said from San Francisco.

Kennedy said video game makers have been hiring Hollywood expertise to bring a more movie-like experience to games.

"Maybe in terms of a games company buying a film special effects company, that is a first, but in terms of its significance we will have to see what that really brings to the games."

Kennedy said some gamers are looking for a movie-like experience while others aren't interested.

He noted that the newest Grand Theft Auto game out this year had a budget of more than $100 million.

"So these games now are really, really rivalling anything, in terms of budget, that's coming out of Hollywood now."

Ubisoft already has a presence in 27 countries including Canada.

For the 2007-08 fiscal year Ubisoft generated sales of 928 million euros - or about C$1.5 billion.