Adam Carr-BraintNour Hamad

Mursal Mohd KabirMark MoskvitineGeraldine Waffo

Agenda

01 - About Ubisoft

02 - Is Ubisoft an MNE?

03 - Reasons for going global

04 - Benefits of being an MNE

05 - Challenges

06 - Video

07 - Conclusion

01

Brief History

1986 – Ubisoft is formed in France by five Guillemot brothers to publish and distribute entertainment software.

1989 – Ubisoft creates distribution subsidiaries in Germany and the United States.

1992 – Creative in-house production studios created in France and Romania. Rayman franchise is created and literally puts Ubisoft on the map as a developer.

02

Brief History

1996 – After a success with its title “Rayman,” Ubisoft is listed on Paris Stock Exchange and a Chinese studio is founded.

1998 – Ubisoft expands by acquisitions of successful studios and creation of new ones like the Montreal studio.

Today Ubisoft is now a company with world’s largest production studio located in Montreal, Canada and annual sales of over 680 million euros (in 2007).

03

-France

-Germany

-Italy

-Spain

-United Kingdom

-Bulgaria

-China

-Morocco

-Romania

-Canada

-USA

Development Studios

04

Major Developers

01 - Nintendo

02 - Electronic Arts

03 - Activision

04 - Ubisoft

05 - THQ

06 - Take-Two Interactive

07 - Sega (USA)

08 - Sega (Japan)

09 - Microsoft

10 - Eidos

05

Why go multinational?

By expanding geographically Ubisoft was able to:

- Achieve higher growth and greater profits as well as larger share of the markets.

- Attract the best talents from all over the world, to increase its global reach accordingly.

- Take advantage of government grants and lower costs in other countries.

06

Why go multinational?

By expanding geographically Ubisoft was able to:

- More efficiently transfer capital, managerial skills, culture, technology, product design, brand names, products and services across countries.

-To keep the average operating cost per employee is $66,000 per year; about a third less than the industry average, according to Ubisoft CFO Alain Martinez.

- Produce innovative, high-quality labels and acquire an in-depth knowledge of its consumers and their expectations. 

07

How the French videogame company recruits its foreign legion:

Going Global

- Go where the talent and students are.

- Go where the competition isn’t.

- Go with the flat organizational chart.

08

Global success?

- Ubisoft’s strategy translated into €680 million in 2007 and growing.

- Its market share rose in all key markets, ranking #4 worldwide.

- Also, it was ranked second leading international publisher.

09

Global success?

- Ubisoft won more than 40 prestigious awards.

- Continues to grow and take advantage of industry’s evolution.

- Projected sale for 2008 are €800 million.

10

Global success!

-Microsoft’s Xbox 360™ and Sony’s Playstation 3™ continue to gain ground and with their success Ubisoft gains potential customers.

- Ubisoft seems a very compelling investment according to various financial analysts.

- Ubisoft has amassed a number of top brands in recent years and is one of the best publishers in the business.

11

Challenges

Competition:

- Huge Budget for The "next generation" of games

- Ubisoft's cost savings a competitive advantage

- American firms profit margins at risk with soaring labor costs

12

Challenges

Competition: Marketing shortcoming

- Limited Marketing efforts

- No top sellers in the United States in 2005

- Market research driving competitors like Electronic Arts

- Low Volume sales result in poor operating margins

13

Challenges

Managing its foreign labor:

- Managing young talent is crucial to the business

- Teams of 80 to 90 employees,

- with managers in a single "war room" to create a game's core technology.

14

Challenges

Contingencies:

- Electronic Arts purchased an almost 20% share of Ubisoft, which was viewed hostile.

- Ubisoft is struggling to compete with other large publishers in the very profitable Massively Multiplayer Online games market.

- Ubisoft constantly faces PR problems (support, Starforce, conflict with EGM)

15

VIDEO

16

Conclusion

17

Ubisoft was able to benefit from becoming an MNE:

- Global reach allowed them to claim their share of resources and markets.

- Significant financial benefits from settling in countries where operating costs are lower. - Possession and development of highly successful franchises.

- Expansion into CGI animation markets with future prospects in the movie industry.

Questions?

Thank you for your attention!(please wake up your neighbour now)

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