Ubisoft 2004 Annual Report Download - page 32

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UBISOFT > 2005 FINANCIAL REPORT
This trend is likely to accelerate with the new generations
of game consoles to be introduced over the next two years,
which will require significantlygreater labour resources
than the current consoles.
Sales by platform
The share represented by 128-bit consoles (PlayStation®2,
Xbox®and Gamecube™) held steady at 67% of sales,
versus 68% in the previous fiscal year. Sales for portable
consoles increased from 5% to 8% thanks to the launch of
new consoles (NintendoDS™ and Sony PlayStation®
Portable (PSP™)).
1.2.4
Change in production
volumes
Number of titles produced by the company itself, titles
co-produced with third parties and titles distributed by the
company:
The stability in the number of titles overall reflects the
priority given to major titles with significant potential. The
group has focused its strategy on the creation of strong,
perennial brands. The number of these brands increased
from three to eight between the 2000/2001 and
2004/2005 fiscal years, while their share of sales rose
from 26% to 65%.
In addition, the company has continuedits efforts to
develop more products internallyor jointlywith third
parties. This demonstrates the strategic importancethat
Ubisoftattaches to its in-house development business to
ensure:
lbetter game quality and more rigorous control of
schedules and budgets;
lthe creation and development of tools and technology
that can be reused from one game to another;
lenhancedprofitability through product development for
several formats and as a result of the group’s
competitiveadvantage in terms of labour costs.
1.2.3
2004/2005 2003/2004
PC CD-ROM 25% 24%
PS2 37% 36%
XBOX®25% 27%
G-CUBE™ 5% 5%
PSX®1% 2%
DS ™ 3% 0%
PSP ™ 1% 0%
Game Boy®Advance ™ 3% 5%
Miscellaneous 0% 1%
Total 100% 100%
Ubisoft’s sales are distributed over the three core activities
of the video games industry: development, publishing and
distribution.
Development covers revenues from titles developed,
produced and marketed by Ubisoft’s in-house studios.
Development also includes sales by third-party developers,
for whom Ubisoft provides supervisory and co-production
services and acts as guarantor of the final product’s
quality.
Publishing covers revenues from titles designed and
produced by third-party developers, for whom Ubisoft
finances and supervises production in exchange for
acquiring the license. Ubisoft then handles localization
and manufacturing, and of course marketing and sales
distribution. The company receives revenue from product
sales and pays royalties to the brand’s developers and/or
owners.
Distribution sales correspond to revenue from the sale of
products from publishers with which Ubisoft has concluded
distribution agreements and for which it handles marketing
and sales. Such agreements may be local, covering a
limited geographic area, or may cover several regions.
The group has continued to focus its attention on
development, which has expanded to 87% owing to the
success of titles developed internally or co-produced with
third parties.
Breakdown of sales by activity is as follows:
Breakdown of sales by core activity (%) 2004/2005 2003/2004 Change in volume
Development 87% 86% 7%
Publishing 10% 11% -4%
Distribution 3% 3% 6%
Total 100% 100% 100%
Breakdown of sales by core activity
1.2.2
Number of titles12004/2005 2003/2004
In-house production 14 10
Co-production 13 9
Publishing 9 16
Distribution 1 2
Total 37 37
1- A title is a single game on one or more platforms. For example, Prince of
Persia Warrior Within™on PlayStation®2, Xbox®,GameCube™, PC and
GameBoy®Advance™ constitutes five products but just one title.