Ubisoft 2001 Annual Report Download - page 42

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42
2.8 Outlook and strategy
2.8.1 Sector and competitive
environment
■With the launch of 128-bit gaming consoles, the market
entered a new cycle of growth. The three new consoles
dominated the market in a very short time. Since their
launch in Europe and North America, the PS®2 has sold over
12 million units, GameCubeTM 1,3 million and XboxTM 1.5 million*.
While the events of September 11, 2001 led to increased
uncertainty in the stock markets, particularly in the tech-
nology sector, the world market for video games is expec-
ted to grow by 20% to 25% in 2002.
Furthermore, the development of online gaming will be an
attractive growth factor. The arrival of internet con-
nections in consoles, which will become operational in the
second semester of 2002, will also speed up growth in
the field of online games.
■
The video game sector has experienced significant concen-
tration over the last ten years. Competition between game
manufacturers is global.
Following several mergers and acquisitions, the number of
leading video game publishers** with more than 10 years
of experience is limited: Activision, Electronic Arts,
Infogrames
Sega
, THQ, and Ubi Soft. In contrast, a number
of major companies have disappeared or been absorbed.
These include such publishers as Broderbund, Sierra,
Cendant, GT Interactive, TLC, Time-Warner Interactive,
and BMG Interactive. Several small-size production stu-
dios have also been bought up (such as Mindscape, Crystal
Dynamics, Westwood, and Wizzards).
Despite this, the market remains highly fragmented. In the
United States, the top 8 publishers control only 63% of
the market. The sector should, however, experience further
concentration over the coming years.
2.8.2 The growth strategy
Ubi Soft's aim is to be one of the top five publishers in the
world (excluding manufacturers), with a target of $1.5 billion
in sales in 2005/2006. The Group's growth strategy is
based on building up a portfolio of strong in-house brands,
such as Rayman®, Rainbow Six™, The Settlers™, Myst®and
Prince of Persia™, on the utilization of well-known licenses,
and on a policy of targeted acquisitions.
2.8.3 Outlook on 2002/2003 fiscal year
Ubi Soft's studios around the world are currently developing
and planning 75 titles for all platforms.
Leading titles for the year include:
■Tom Clancy's Splinter Cell™
■Rayman®3: Hoodlum Havoc
■Tom Clancy's Rainbow Six®: Raven Shield™
■Tom Clancy's Ghost Recon™
■XIII
■The Sum of All Fears™
In the 2002/2003 financial year, seasonal variations between
the first and second quarters will be more pronounced than
usual. In contrast with the 2001/2002 financial year, major
titles will be released in the second semester. The Group's
business, excluding external growth, and at a constant
exchange rate (up to June 2002), should grow by 17% to
22%, generating sales of 430-450 million Euros over the
financial year.
Ubi Soft is already well-positioned for the 2003/2004 financial
year: several major titles*** are scheduled or in preparation,
such as:
■Project BG&E
■Prince of Persia®
■Tom Clancy's Ghost Recon™ 2
■Crouching Tiger, Hidden Dragon™
■Settlers®V
■Myst®On Line
■Far Cry™…
* Source : International Development Group, March 2002.
** Manufactures excluded.
*** Working titles.