Ubisoft 2013 Annual Report Download - page 47

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Management Report
2013
42
The current operating income showed an improvement for the financial year 2012/2013 thanks to the
success of Assassin’s Creed 3, Just Dance 4, Far Cry
3, and the strong growth in the online/digital
segment. Nevertheless, the uncertain economic situation and the transition to new generation
consoles could impact the Company’s performance.
Size of the video games market in 2012
1
Physical game sales: $15.3 billion
Digital and online sales: $29.4 billion (including China)
Main competitors in the physical game sector: Electronic Arts, Activision, Take-Two and Nintendo
Main competitors in the online game sector: Electronic Arts, Activision, Tencent and Zynga
Market share in 2012 in terms of physical sales (GFK, Chart-Track, NPD)
US: Third-largest independent publisher with a 10.7% share of the market (compared with a third-
place ranking and an 8.4% share in 2011)
EMEA: Third-largest independent publisher with an 11.2% share of the market (compared with a third-
place ranking and an 8.7% share in 2011)
RISKS OF A DELAY OR POOR START TO THE RELEASE OF A FLAGSHIP 1.7.1.3
GAME
Seasonal trends in the video games business:
Revenue/quarter in
millions of euros
2012/2013
Breakdown
2011/2012
Breakdown
2010/2011
Breakdown
1st quarter
131
10%
103
9%
161
15%
2nd quarter
148
12%
146
14%
99
10%
3rd quarter
802
64%
652
62%
600
58%
4th quarter
175
14%
161
15%
178
17%
Consolidated annual
revenue
1,256
100%
1,061
100%
1,039
100%
The third quarter of the financial year represents, on average, 61% of annual revenue over the last
three financial years.
In a very competitive and above all seasonal market, increasingly characterized by the need to release
big hits, the announcement of a delay in releasing an expected game may have a negative impact on
the Group’s income and future results and thus cause a drop in its share price.
A game’s launch may be delayed by the difficulty in accurately predicting the time required to develop
or test it.
The launch of a game below the standard required for it to fully realize its potential can negatively
impact the Company’s results.
Whether in the organization of its teams or ongoing research into improving development processes,
Ubisoft relies on the efficiency of its internal expertise and synergies between its studios in order to
anticipate these risks and alert the management teams as necessary.
1
Sources: NPD, Chart Track, GFK, Nielsen and PriceWaterhouseCoopers