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Ubisoft v1.0 - Analysis of the 3rd biggest game publisher
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Ubisoft v1.0 - Analysis of the 3rd biggest game publisher

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V1.0 of the analysis of Ubisoft by VGB. This company developed Assassin's Creed, Rayman, Splinter Cell, Prince of Persia. First topics adressed: …

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 Ubisoft

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  • Hello ladies and gents! Just wanted to point out that this is v1.0 for a reason - it's pretty light on the analysis side as I'm currently digging into financial statements of the company.

    Stay tuned for version 2.0 hopefully arriving in the next week! And let me know in the comments if there's anything you'd like me to focus on.
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  • 1. THE VIDEO GAME BUSINESS www.videogamebusiness.wordpress.com @videogamebiz videogamebuziness@gmail.com The Video Game Business © 2
  • 2. The Video Game BusinessGroup Activities The Video Game Business © 3
  • 3. Group Activities 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 The Video Game Business © 4
  • 4. Group Activities as % of Total Sales Sales in 08/09 Sales in 09/10 4% 8% 7% 11% Development Publishing Distribution 81% 89% The Video Game Business © 5
  • 5. Increase of Development as % of Sales (see previous graph) Pros ConsStronger brand: Ubisoft will have a greater focus on generating new Higher risk: investment of capital in new IPs + cost of developmentIPs which can turn into multi-million dollar franchises has been increasing increased = higher exposureRoyalties as % of sales ↓ Greater fixed costs (salaries, lease/depreciation) as a proportion of total sales  if sales decrease, costs will not down as quicklyLoss 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) The Video Game Business © 6
  • 6. Change in Number of Titles Developed4540353025 06/0720 07/0815 08/0910 09/1050 Internal Co-production Publishing Distribution production (dvmpt) (dvpmt) The Video Game Business © 7
  • 7. The Video Game BusinessHistory The Video Game Business © 8
  • 8. History 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 The Video Game Business © 9
  • 9. History (continued) 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 Canada  merged w/ Montreal studio 2006 – Acquisition: Driver and Far Cry franchises – New licence: CryEngine – Sales offices: Mexico – Studio creation: Bulgaria The Video Game Business © 10
  • 10. History (continued) 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) The Video Game Business © 11
  • 11. References 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 The Video Game Business © 12