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THE GROUP’S BUSINESS ACTIVITIES AND RESULTS FOR FISCAL YEAR 2007-2008
49
1
Recent events, outlook and strategy
Recent developments
April 2008
Ubisoft announced revenue of €928 million for fiscal
year 2007-08, up 43% at constant exchange rates, and
confirmed its target for current operating income before
stock options of roughly 14%. The fiscal year saw the
solid performance of long-standing franchises such as
Rayman®, Ghost Recon®, Rainbow Six®and Settlers®,
the sharp growth in the "Games For Everyone" casual
games segment, which reported a tripling of revenue
over the fiscal year, and the steady launch of new crea-
tions with Assassin's Creed®and Imagine, which were
highly successful.
Ubisoft opened a new development studio in Kiev, in the
Ukraine. The studio team should expand to some fifty
employees over the next twelve months.
Ubisoft signed an agreement with Gameloft to acquire its
development studio based in Pune, India. Established at
the end of 2006, the studio currently employs 120 deve-
lopers and testers. The goal is to have 200 employees
over the next 12 months and 500 within a couple of
years.
May 2008
Disposal of all Ubisoft stock held in connection with the
equity swap agreement on May 12, 2008: the remaining
1,243,121 shares were disposed at an average price of
€61.68.
Market outlook
The video game market was particularly strong in 2007,
with average growth of nearly 26% in Europe, North
America, Australia and New Zealand. This increase largely
exceeded the expectations of industry professionals, par-
ticularly due to the phenomenal success of the Nintendo
DS™ and Wii™. The market was also sustained by solid sel-
ling prices, by the high number of games sold on Xbox360®
and by the arrival of the PlayStation®3.
2008 should see growth of at least 15% and continue to
impact an increasingly wide public attracted by the ci-
nema-like visual experiences offered by Xbox360®and
PlayStation®3 and by better accessibility of Nintendo con-
soles.
With regard to market players, as in prior years, 2007 saw
a series of studio and brand acquisitions by the major video
game publishers. Accordingly, Ubisoft acquired the
Anno™ brand and the Digital Kids studio and Electronic
Arts acquired the Bioware and Pandemic studios. The con-
solidation phase accelerated with Vivendi’s offer to acquire
Activision and the offer by Electronic Arts (in 2008) for
Take-Two, intensifying the race for creativity and talent
required by the video game industry.
1.11
1.11.1 1.11.2
Commitments
Following the acquisition of the Tom Clancy name for €46 million, Ubisoft still owes €14.8 million on the purchase price.
Various products are marketed under licensing agreements signed by Ubisoft Entertainment SA. The commitments undertaken
by the Company provide for the payment of guaranteed minimum royalties. As of March 31, 2008, commitments made by
virtue of this guaranteed minimum amounted to €80.3 million.
The Company has no other future capital expenditure that is already subject to a firm commitment from senior management
at the Company.
There is no minority interest in the Group’s shareholder structure, so there is no risk associated with the buyout of minority
interests.
1.10