Ubisoft 2014 Annual Report Download - page 50
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Management Report
2014
45
The Company is also striving to promote collaboration between its various development studios in
order to ensure the optimization of its development power and to benefit fully from its presence in low-
cost zones.
In Canada and in Singapore, Ubisoft has substantial grants and any change in government policy
could have a significant impact on production costs and the Company’s profitability. Ubisoft ensures
that it renegotiates these agreements on a regular basis and does not foresee any risk over the next
few years.
Size of the video games market in 2013
1
Physical game sales: €17.6 billion
Digital and online sales: €27.1 billion
Main competitors in the physical game sector: Electronic Arts, Activision, Take-Two and Nintendo
Main competitors in the online game sector: Electronic Arts, Activision, Tencent, King Entertainment,
Supercell and Zynga
Market share in 2013 in terms of physical sales (GFK, Chart-Track, NPD)
United States: fourth-largest independent publisher with a 7.9% share of the market (compared with a
third-place ranking and a 10.7% share in 2012)
EMEA: fourth-largest independent publisher with a 9.1% share of the market (compared with a third-
place ranking and a 11.2% share in 2012)
1.7.1.3 RISKS OF A DELAY OR POOR START TO THE RELEASE OF A FLAGSHIP
GAME
Seasonal trends in the video games business:
Sales/quarter in
millions of euros
2013/2014
Breakdown
2012/2013
Breakdown
2011/2012
Breakdown
1st quarter
76
8%
131
10%
103
9%
2nd quarter
217
21%
148
12%
146
14%
3rd quarter
520
52%
802
64%
652
62%
4th quarter
194
19%
175
14%
161
15%
Consolidated annual
sales
1,007
100%
1,256
100%
1,061
100%
The third quarter of the financial year represents, on average, 59% of annual sales over the last three
financial years.
In a very competitive and above all seasonal market, increasingly characterized by the need to release
big hits, the announcement of a delay in releasing an expected game may have a negative impact on
the Group’s income and future results and thus cause a drop in its share price.
A game’s launch may be delayed by the difficulty in accurately predicting the time required to develop
or test it.
1
Sources: NPD, GFK, AppAnnie, PriceWaterhouseCoopers and internal projections.