www.videogamebusiness.wordpress.com

THE VIDEO GAME BUSINESS

@videogamebiz

videogamebuziness@gmail.com

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Group Activities

The Video Game Business

3The Video Game Business ©

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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8The Video Game Business ©

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