ubisoft v1.0 - analysis of the 3rd biggest game publisher
DESCRIPTION
V1.0 of the analysis of Ubisoft by VGB. This company developed Assassin's Creed, Rayman, Splinter Cell, Prince of Persia. First topics adressed: - business segments - segments as % of sales - history of the company To come: - in-depth analysis of annual report - management vs stock price - key brands - studio locations + what they have done under UbisoftTRANSCRIPT
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THE VIDEO GAME BUSINESS
@videogamebiz
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Group Activities
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Group Activities
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Development– Sales of titles developed, produced and marketed by Ubisoft’s internal studios– Revenues from 3rd party developers supervised and co-produced by Ubisoft
Publishing– Sales of titles produced by 3rd parties but financed and supervised by Ubisoft
in exchange for acquiring the licenses– Costs: localization, manufacturing, sales and marketing, payment of royalties
to developers and/or brand owners
Distribution– Sales on products from publishers with which Ubisoft has signed distribution
agreements and handles sales and marketing– Can be limited to specific geographic areas
Group Activities as % of Total Sales
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89%
7%
4%Sales in 09/10
Development
Publishing
Distribution
81%
11%
8%
Sales in 08/09
Increase of Development as % of Sales
(see previous graph)
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Pros Cons
Stronger brand: Ubisoft will have a greater focus on generating newIPs which can turn into multi-million dollar franchises
Higher risk: investment of capital in new IPs + cost of developmenthas been increasing increased = higher exposure
Royalties as % of sales ↓ Greater fixed costs (salaries, lease/depreciation) as a proportion of total sales if sales decrease, costs will not down as quickly
Loss of market share less likely as product offered is different fromthe competition (publishing/distribution: hard to stand out from thecrowd by ways other than lower offering lower prices)
0
5
10
15
20
25
30
35
40
45
Internalproduction
(dvpmt)
Co-production(dvmpt)
Publishing Distribution
06/07
07/08
08/09
09/10
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Change in Number of Titles Developed
History
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History
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1986: Creation of Ubisoft 1989-1995: International expansion
– Distribution subs: USA, Germany and UK– Studio creation: France & Romania
1996– Flotation on EPA (Paris Stock Exchange)– Studio creation: Shanghai (China)
1997– Studio creation: Montreal (Canada)
1998– Studio creation: Morocco, Spain and Italy studios
1999– Studio creation: Annecy (France) and Montpellier (France)– Distribution subs: Honk Kong, Netherlands, Denmark, etc
History (continued)
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2000– Acquisition: Red Storm Entertainment (Tom Clancy games)
2001– Acquisition: Blue Byte Software (Games: Settlers) and game division of
The Learning Company (Games: Myst and Prince of Persia)
2003– Acquisitions: Tiwak studio (Game: Tork)
2005– Acquisition:MC2-Microids in Canadamerged w/ Montreal studio
2006– Acquisition: Driver and Far Cry franchises– New licence: CryEngine– Sales offices: Mexico– Studio creation: Bulgaria
History (continued)
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2007– Studio creation: Chengdu (China)– Acquisition: Digital Kids (Japanese studio specialized in DS games),
Action Pants (Canada), Southlogic (Brazil), Massive Entertainment(Sweden) and an unnamed studio in Pune (India)
– Brands purchased: Anno and Tom Clancy name– Digital image production studio (Canada)
2008– Acquisition: Hybride (special effects in films)
2009– Studio creation: Toronto (Canada)– Acquisition: Nadéo (Trackmania)
Business Week:– Management: http://investing.businessweek.com/research/stocks/people/people.asp?ticker=UBI:FP
Ubisoft:– Annual reports: http://www.ubisoftgroup.com/index.php?p=195
– Ubisoft Group: http://www.ubisoftgroup.com/
Wikipedia:– Yves Guillemot: http://fr.wikipedia.org/wiki/Yves_Guillemot
– MC2-Microids: http://fr.wikipedia.org/wiki/Micro%C3%AFds
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References