Ubisoft 2008 Annual Report Download - page 82

80
UBISOFTANNUAL REPORT 2009
The launch of a game below the standard required for it to fully realise its potential can negatively impact the Company’s results.
The priority is therefore to develop high-quality games satisfying the expectations of players in terms of functionality while meeting
cost targets and deadlines.
Ubisoft relies on the effectiveness of its internal expertise in order to anticipate these risks and provide the necessary warnings
to the management teams, whether through the organisation of its teams and the continued effort to improve development
processes, the monitoring of external production to ensure that it adequately meets Ubisoft’s quality criteria, or the quality control
and assurance managed by dedicated teams throughout the development cycle.
1.1.7.1.4 Employee-related risks
The Group’s success largely depends on the talent and skills of its production and marketing teams in a highly competitive
international market. If the Group were no longer able to attract and retain new talents, or were no longer capable of retaining or
motivating its key employees, the Company’s growth prospects and nancial position could be affected.
In order to respond to growing creative and technological challenges, the Company has established an active recruiting, training
and international expansion policy, in particular via the following initiatives:
• opening new studios (Sao Paulo, Kiev) and acquiring existing studios (Hybride Technologies, Massive Entertainment, Southlogic,
Action Pants Inc., and studio in Pune, India).
• strengthening its partnerships with universities: the Ubisoft Campus in Montreal; creation of a Campus in Casablanca in October
2008; strong relationships with the leading schools in the various countries where the Group is present,
• the addition of tools and forums to encourage skills sharing.
All of the programmes established by Human Resources at a local and international level are rst and foremost designed to
attract, train, retain and motivate employees with strong technical and/or managerial skills: development opportunities, share
purchase plans, stock option plans, personal development plans, etc.
These efforts, which are essential for the Company’s future growth, led to the recruitment of nearly 1,300 talents at production
studios, with around a third coming via acquisitions.
1.1.7.1.5 Risks associated with the acquisition and integration of new entities
The Company has an international expansion policy, reected in recent months by the opening and acquisition of production
studios in new territories. The integration of these studios is critical for the Company’s success in order to meet future growth
targets.
To ensure the successful integration of these new entities, the Company has established various solutions to support the teams
that promote information sharing and training, in particular through partnerships with existing studios. Similarly, the Company
continues to develop the skills of its administrative teams in order to limit nancial, tax or legal risks associated with the whole
gamut of local regulations.
Ubisoft’s healthy balance-sheet structure, with a net nancial surplus of €154 million, and the level of available capital should
minimise the risks associated with these takeovers.
Nevertheless, the following risks could arise:
• dilution of the current shareholder structure as a result of an acquisition paid in shares;
• creation of signicant long-term debt;
• potential losses that could have a negative impact on protability;
• provisioning for goodwill or other intangible assets.