Ubisoft 2000 Annual Report Download - page 33

>Evil Islands Ravensburger Interactive
>The Ruins of Kunark™
EverQuest®: The Scars of Velious™ Sony Online Entertainment
EverQuest®: Shadows of Luclin™
>PlanetSide Sony Online Entertainment
c) Distribution: controlling an international network
Ubi Soft handles the marketing and sale of its own products as well
as those of more than fifty third-party publishers, such as Sony
Online Entertainment worldwide (excluding the United States),
Disney Interactive in Scandinavia, Capcom in China, and Lucas Arts,
which the Group represents in various regions. When distributing
products from third-party publishers, Ubi Soft studios handle all the
localization needed to create bilingual or even multi-lingual versions
(software, packaging and user manuals) according to the distribu-
tion areas agreed in the contract and the formats concerned.
The localization studio teams work in advance of project develop-
ment in order to integrate the constraints in the countries for which
games are intended. The studio is thus responsible for giving vital
advice to developers. Between April 2000 and March 2001, more
than 400 projects were completed by the Ubi Soft localization stu-
dio, which adapted products into over 24 languages.
Ubi Soft thus has an extensive range of more than 1,000 active titles
worldwide, and this gives it extra bargaining power in its negotia-
tions with local distributors.
Ubi Soft distributes its products in 52 countries. Distribution is
handled either by its direct distribution subsidiaries in 17 countries
(United States, Brazil, France, United Kingdom, Germany, Australia,
Spain, Italy, Netherlands, Belgium, Denmark, Canada, China, Japan,
Sweden, Austria, Hong Kong) or through distribution and licensing
agreements.
Marketing and sales are organized into two major areas: EMEA
(Europe, Middle East and Asia) and the United States.
In 2000/2001, thanks to its latest acquisitions the Ubi Soft European
distribution network was consolidated by integrating the German,
Belgian, Dutch, Canadian and French distribution networks belon-
ging to the Guillemot Corporation. Ubi Soft also benefited from new
direct distribution channels in Austria (GameBusters) and Italy (3D
Planet SpA). With its acquisitions in the United States, in particular
the Entertainment Division of TLC, Ubi Soft now has a presence in
the largest US retail chains, including Wal-Mart.
These distribution arrangements guarantee Ubi Soft local control of
its products in an environment in which display space is becoming
all the more precious as the number of titles increases. Ubi Soft now
has direct control over its distribution in the United States and
Europe. In this field the company is in fourth place in Europe and
first place in China, where it also distributes Japanese publishers.
International distribution is focused on a targeted, local marketing
strategy.
With regard to sales promotion, Ubi Soft is continuing to extend its
partnerships with big retail brands:
>Nestlé, Coca Cola, Disney Channel and Canal +, for the promotion of Disney’s Dinosaur in
Spain;
>Sketchers, for the promotion of Rayman® in the United States;
>Toy’s “R” Us, for the promotion of Disney’s Jungle Book Groove Party in the United States;
>Packard Bell, NRJ, Pizza Hut, Liberty TV and Sport Avenue in Belgium;
>ASDA “Golden Puff” cereals, for the promotion of Rayman® in the United Kingdom;
>Omo, for the promotion of Disney’s Dinosaur in the Netherlands;
>Cuétara cookies, for the promotion of Golden Glory: The Road to Eldorado in Spain;
>Shell, for the promotion of Grand Prix 3 in France.
In the field of advertising, Ubi Soft works regularly on all its games
with an international network of agencies. The Group also ensures
that each campaign is effective by carrying out consumer impact and
approval tests.
With regard to sales promotion, Ubi Soft has signed a number of
partnership agreements with established brands in quick succes-
sion in order to make its games better known.
Finally, online marketing is a key focus of Ubi Soft’s marketing stra-
tegy. Our sites today are not only informative and rich in content, but
they also make full use of all the advantages of this medium, such as
interactivity, real-time updates, and so on.
4.1.4. Business environment
a) An overview of 2000/2001
At the end of 2000, the global market for video game software and
hardware was estimated at about USD 20 billion1, more than global
sales of pre-recorded video cassettes and DVDs (USD 12 billion) and
worldwide cinema takings. According to a survey carried out by the
trade association Interactive Digital Software Association (IDSA) on
entertainment-oriented activities2, video games come before televi-
sion, the Internet, reading, movies or video. 60% of Americans say
they play video games, i.e. 165 million people.
There are three major markets for video games: Europe, the United
States and Japan. In Europe, Germany, Great Britain and France
account for 60% of sales.
Software for consoles represents two-thirds of video game sales,
while programs for personal computers (PC or Mac) account for the
other third. There are, however, differences between regions: the
share of console games comes to 90% in Japan, due to the influence
of Japanese manufacturers (Sony and Nintendo), but falls to less
than 60% in Europe.
According to Arcadia3(April 2001 survey), the games industry in the
United States will grow by 10% in 2001, and growth in 2002 should
reach 30%. In 2001, 21.1 million new machines will be installed in
the US, with total sales of 114.9 million games. In 2002, the number
of new machines will be 26.4 million and the number of new games
135.2 million. The European market is the mirror image of the
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