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Annual Report ANNUAL REPORT SUMMARY > A statement from Yves Guillemot 02 > Top management 06 > Over 20 years of growth 08 > A robust industry 12 > 2008-09 at a glance 14 > A global player 16 > A strategy built to last 18 > The power of our brands 21 > Calling all gamers 22 > From talent to games 43 > Financial report 47 COMPANY PROFILE 01 The years may go by but no two are alike for Ubisoft. Since its creation back in 1986, the company has founded its strategy upon the creation and development of proprietary brands, an international distribution network, talented and motivated teams as well as innovative technologies. 23 years later, Ubisoft’s motivation and foundations remain unchanged and the group’s ambitious recruitment policy has enabled it to position itself as the second largest internal creative force in the industry. This year, once again, the company has continued to reinforce its studios’ international reach and to diversify its brand portfolio. With strong results that surpass the threshold of one billion euro in sales, Ubisoft has strengthened its positioning among the top leaders of the industry and ensured that it has the means to live up to its ambitions. An industry pioneer, Ubisoft has been a catalyst in the convergence of video games and other media. To create unprecedented gaming experiences and explore the new frontiers of immersion, the company wants to bring its flagship brands to multiple media. Video games, movies, comic books – Ubisoft is establishing itself as a key player, who imagines today the entertainment of tomorrow and is always ready to conquer new territory. UBISOFT ANNUAL REPORT 2009 A STATEMENT FROM YVES GUILLEMOT A statement from Yves Guillemot 03 Ubisoft performed very well in 2008-2009 despite intense 20 million units sold. We have thus affirmed our know-how on competition and an uncertain economic environment. Nintendo consoles with a well-adapted offering that currently We were thus able to record solid growth, with annual represents 47% of revenues. revenues increasing by 18.4% at constant exchange rates. We also crossed the threshold of one billion euros in turnover, We have also succeeded in making the most of new for the first time, and succeeded in meeting our objective of technologies to innovate, create new brands and break into doubling revenue in four years, while increasing our operating new gaming segments. We have brought new franchises income by 370% during the same period. to life, such as H.A.W.X.TM and EndWar®, using satellite geo-location for the first time in an air combat simulation Although we need to remain prudent in 2009, and even more and voice recognition in a military strategy game. We have attentive and reactive to market developments, we have good also exploited the potential of the WiiTM balance boardTM reason to be optimistic. Firstly, we operate in an industry to attract new customers and enter new segments; sales that is resisting relatively well to the crisis and continues of the last Rayman Raving Rabbids® surpassed those of to grow, thanks to the continuous arrival of new customers. the previous opus by 50%, and the release of Shaun White Furthermore, Ubisoft’s performance shows the solid nature marks our successful entrance into the extreme sport of our growth model, which is based on three main pillars: segment with over 2.8 million units sold. strong studios with a competitive cost structure, the creation of new franchises and a desire for permanent innovation. The pursuit of our convergence strategy is another strategic advance. In order to move forward more quickly For the first time, Ubisoft made it into Fast Company’s ranking in this direction, we purchased Hybride, a Canadian studio of the World’s 50 Most Innovative Companies. In the 35th spot, specialized in the creation of digital imagery and special Ubisoft is the second video game company, after Nintendo, to effects. The talents from Hybride have reinforced our CGI appear in the list. We also succeeded in creating three new structure, all the while continuing to work for major players franchises last year and can now capitalize on a portfolio of in the film industry. Our aim is to progressively integrate their 18 multimillion unit-selling brands. know-how in order to continuously improve the quality and production value of our games. Strategic advances in 2008-2009 Finally, 2008-2009 was a good year for the recruitment of new Once again we achieved strong growth and consolidated talent. The year was marked by the opening of studios in Kiev our leadership in the Games for Everyone segment. Driven and Saõ Paulo and the acquisition of Massive Entertainment, by the success of our Petz®, Imagine® and MyCoach ranges, Action Pants, South Logic and Pune. We also strengthened our casual gaming business progressed by 43%, with over existing creative teams, especially in Singapore, Chengdu UBISOFT ANNUAL REPORT 2009 A STATEMENT FROM YVES GUILLEMOT and Montreal. In total, 1,400 new creative talents came on We also intend to fully exploit both current and future board. These additional resources will allow us to develop technologies so that we can continue to innovate and surprise games for both present and future platforms. We therefore our consumers. continue to invest in the future and to prepare for the arrival of the next-generation consoles. We will thus continue to explore all the possibilities offered by present-day consoles to offer our consumers new gaming Objectives for 2009-2010 experiences. We will also continue to anticipate and study new technologies selected by console manufacturers - such Training new people brought on board and helping teams as the 3D camera recently adopted by Microsoft or the Touch acquire new skills so that we can uphold our reputation as Pad from Apple. These technologies will have a major impact one of the best creators in the industry is our first strategic on the future of gaming and we need to position ourselves on objective. them quickly, as we have successfully done in the past on the WiiTM. We have been working in particular on the 3D camera To help teams hone their video games skills, we will concentrate for over a year now and intend to intensify our efforts so that on developing our training programs and campuses and we can fully master this technology and its applications for strengthen ties with top universities and external partners. video gaming. Video game creation today requires new skills, such as This year we want to get even closer to our players so that storytelling, special effects or production value, already we can improve the quality of their experiences within all well-known to the film industry. In order to integrate these of Ubisoft’s creative worlds. skills more quickly, we plan to attract new talent - specifically from the movies - by relying on the reputation of our teams and It is by continuing to use online technology in particular that opportunities to come out of the economic downturn. We will we will place our customers at the very heart of our creations also continue to join forces with the best Hollywood directors to whereby reinforcing their loyalty. UPLAY, our community co-produce creative worlds, sources of innovation and mutual platform, will be online by the end of 2009. It will give players enrichment for our teams. the possibility to extend and share their gaming experiences 05 “In total, 1,400 new creative talents came on board. These additional resources will allow us to develop games for both present and future platforms. We therefore continue to invest in the future and to prepare for the arrival of the next-generation consoles.” with other gamers, build up credit to improve their community reinforces our confidence in the quality and diversity of our status, receive online technical support or download additional 2009-2010 offering. We expect the second semester to be Ubisoft content. exceptional with the highly anticipated launches of Assassin's Creed® 2, Avatar: The Game, Red Steel® 2, Rabbids Go Finally, we will continue to strengthen our brands in order HomeTM, alongside other original creations, licensed games to reach an ever-increasing consumer base. and new additions to our casual gaming ranges. Our ambition is to double sales of our franchises; in other words, we hope to increase the average sale of a game from I would like to take this opportunity to extend my warm thanks three to six million units sold. To achieve this and establish our to the Ubisoft teams, who, through their talent and energy, brands as the references in the video game industry, we will enable us to make strides each year in the quality of our invest in our brands even more. We will aim to create games games and the reinforcement of our brands. I would also like that are even more connected, attractive, immersive, intense to thank our partners, shareholders and gamers for renewing and varied in order to strengthen each one of our brands. their confidence in Ubisoft each year. We will also continue bringing our franchises to other media. This year we will be publishing new Tom Clancy novels, and for the first time, graphic novels. We will also be airing mini- series on the Internet and launching more game-related merchandise. This diversification will allow us to reach a wider audience and strengthen the overall appeal of our imaginary worlds. It will also generate revenue sources that we plan to reinvest in our games and brands in order to strengthen them even more. In conclusion, 2008-2009 was a solid year for Ubisoft. Overwhelming praise for our line-up at this year’s E3 UBISOFT ANNUAL REPORT 2009 YA TOP MANagEMENT “Ubisoft’s performance shows the solid nature of our growth model, which is based on three main pillars: strong studios with competitive costs, the creation of new franchises and a desire for permanent innovation.” Yves Guillemot • “Our consumers and fans are our prime motivation.
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