Ubisoft – formally known as Ubisoft Entertainment SA – is a French video game company which is headquartered in suburban Paris in addition to several other development studios across the world.
The video game franchise includes popular video games such as Raving Rabbits, Prince of Persia, Rayman, Just Dance, Assassin’s Creed and more. As of 2018, Ubisoft became the fourth largest publicly traded game company in the US and Europe; coming in the top three was Activism Buzzard, Electronic Arts and Take-Two Interactive, who had higher totals in revenue and market capitalisation. The founding family – The Guillemot’s – had developed themselves as a business who supported farmers in the Brittany province and North West France as well as in the UK. The five sons of the family were responsible for the company’s sales, distribution, accounting, and management alongside their parents before they all went to university.
In the early 1980s, the five brothers of the family had overseen the costs of buying computers and software from a French supplier and opted that the expense was just too much and resolved the expense by coming up with a mail-order business around computers and software. They originally saw profit through this initial mail-order business, but this soon changed as they started getting a considerable amount of orders from French retailers as they were able to undercut other suppliers up to 50%. By 1986, Ubisoft was earning approximately 46 million French Francs which equates to approximately $5.8 million.
Fast forward to 2015, Ubisoft had substantially expanded even despite a major data breach in its network in 2013. This resulted in the potential exposure of 58 million accounts inclusive of usernames, email addresses and encrypted passwords. Despite this being what could be perceived as a setback, it was merely a bump on the road. By 2015, they had successfully launched Assassin’s Creed and Prince of Persia as well as investing $373 million into their Quebec operations which were set to generate approximately 5,000 jobs. By this point of succession, Ubisoft’s annual net income was approximated at $110 million.
Although the net income of Ubisoft would indicate that there may have been a similar reflection regarding stock price, this is in fact not the case. Ubisoft’s stock has recently decreased by 7%. The emergence of the coronavirus meant that Ubisoft had to delay the releases of Rainbow Six and Far Cry Games. The Far Cry Games were set to be released this month and Rainbow Six was meant to have been launched at some point during last year, however, due to Covid-19, Ubisoft encountered some production issues which consequently led to a pushback in the release of the games and a drop in stock price. As for the release of the games, they are now perceived to be potentially released between April of this year and March of 2022; it is hard to tell if this will be the case as the future regarding the pandemic is unforeseeable.
As for the future of Ubisoft, it is not thought that the recent stock decline will affect revenue and or annual net income. The future for Ubisoft is set to have an influx of profit, surpassing margins previously hit.
Conclusively, it is apparent that Ubisoft has grown substantially since 1986 and will arguably continue to do so. However, whilst acknowledging the growth and the incredible margins achieved by Ubisoft, it is also worth acknowledging the unforeseeable circumstances in the plight of a pandemic.
Although coronavirus has largely benefited the gaming industry, it is hard to tell how coronavirus will continue to impact production and potential execution of future games. That being said, Ubisoft is set to continue expansion and as well as implementing a change in their working culture.
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