Ubisoft Executive Summary
EMBA 2010-2012, Group F
UBISOFT CASE STUDY – EXECUTIVE SUMMARY
Industry’s structure – Porter’s five forces
Competitive Rivalry within Industry - HIGH * Very attractive, dynamic market * Large number of competitors * High and innovative technology in use * Sophisticated, cross industry creation process (Telco, IT, entertainment)
Bargaining power of Suppliers – LOW * Games made-in house, by hired developers having access to necessary software and engine licenses * Fight for exclusivity on important game titles
Bargaining power of Customers – LOW * Mass market, mass retailers, specialty stores * Online purchases, electronic game distribution as the cheapest source * Large number of alternatives, low bargaining power
Threat of new Entrants – HIGH * Little initial investment needed * Little exit costs, no fixed assets (licenses, workstations) * Established brand not necessary - the most important part is game playability * Barrier size for major game releases - average size of production – 12 min $, 2 years development + marketing costs
Threat of Substitute Products – LOW * Non-electronic entertainment * Non corporate game creators * Open source alternatives
Main opportunities and threats for video game industry
Opportunities
Partnership with film-makers, sport’s industries
New technologies (mobile, web-browser, Flash)
Cross-platform games distribution
Online and social network gaming
Shift of gamer profile – older and more woman,
Shift of business models in game advertisements
Games developed after blockbuster hits
Subscription games – new trend, access to cash
Consolidation and unification hardware platforms
Industry moving strongly toward online gaming, both for massively-multi-player concepts and for on-line multi-player versions of existing titles
Penetration of untouched markets by means of bundling
Electronic game
UBISOFT CASE STUDY – EXECUTIVE SUMMARY
Industry’s structure – Porter’s five forces
Competitive Rivalry within Industry - HIGH * Very attractive, dynamic market * Large number of competitors * High and innovative technology in use * Sophisticated, cross industry creation process (Telco, IT, entertainment)
Bargaining power of Suppliers – LOW * Games made-in house, by hired developers having access to necessary software and engine licenses * Fight for exclusivity on important game titles
Bargaining power of Customers – LOW * Mass market, mass retailers, specialty stores * Online purchases, electronic game distribution as the cheapest source * Large number of alternatives, low bargaining power
Threat of new Entrants – HIGH * Little initial investment needed * Little exit costs, no fixed assets (licenses, workstations) * Established brand not necessary - the most important part is game playability * Barrier size for major game releases - average size of production – 12 min $, 2 years development + marketing costs
Threat of Substitute Products – LOW * Non-electronic entertainment * Non corporate game creators * Open source alternatives
Main opportunities and threats for video game industry
Opportunities
Partnership with film-makers, sport’s industries
New technologies (mobile, web-browser, Flash)
Cross-platform games distribution
Online and social network gaming
Shift of gamer profile – older and more woman,
Shift of business models in game advertisements
Games developed after blockbuster hits
Subscription games – new trend, access to cash
Consolidation and unification hardware platforms
Industry moving strongly toward online gaming, both for massively-multi-player concepts and for on-line multi-player versions of existing titles
Penetration of untouched markets by means of bundling
Electronic game