Ubisoft 2005 Annual Report Download - page 17

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With an ambitious goal to double revenues and triple net income by 2010, Ubisoft intends
to capitalize on its technological lead and its reputation for quality by actively pursuing
its strategy of in-house development, strong brands and portfolio diversification.
In the rapidly expanding video game market, staying one step ahead of the competition
by being the first to successfully exploit new technologies is a key component in gaining
market share. Building strong consumer relationships and offering unique gaming expe-
riences that will seduce both current and future gamers is another vital factor in staying
on top. That’s why Ubisoft is truly committed to striving for creativity, quality and inno-
vation in everything it does.
This bold stance has some heavy financial implications however, especially during a
market transition period. Ubisoft has therefore taken the necessary strategic actions to
ensure it is fully prepared to benefit from the rapid growth expected from 2007
onwards, while planning ahead to guarantee the company’s long-term revenues and
profitability.
The company’s attentive management of this current transition period – which enabled
it to outperform the market in fiscal 2006 – combined with its long-term strategy to
create an increasing number of strong entertainment brands and enter new high poten-
tial market segments, reinforces Ubisoft in its objective to double revenues and triple
its net income in the next four years.
NEXT STARTS HERE
Ubisoft’s strategic decision to position itself early
on next-generation consoles has already started
to pay. With next-gen sales (home and handheld
consoles combined) accounting for almost a third
of the company’s full year revenues in fiscal 2006,
and an outstanding 61% of sales in the 4th fiscal
quarter alone, Ubisoft has earned its reputation
as a next-gen leader.
The successful launch of four titles on Microsoft’s
Xbox 360™, including the critically-acclaimed Tom
Clancy’s Ghost Recon Advanced Warfighter™,
largely contributed to Ubisoft’s leadership on
the first of the next-gen home consoles to hit
the market. Ranking number one independent
publisher in France on the Xbox 360™and number
two in the US, UK and Canada in Q4 fiscal 2006,
Ubisoft will further prove in fiscal 2007 that it’s
more than ready to seize the imminent opportunities
afforded by next-gen technology thanks to a strong
line-up of launch titles for Sony’s PlayStation®3
and Nintendo’s Wii™.
15
UBISOFT • 2006 ANNUAL REPORT
STRATEGY