Ubisoft is the world’s third-largest producer, publisher, and distributor of video games for consoles, PC, smartphones, and tablets in both physical and digital formats, with an estimated 10% market share. The group has grown thanks to a strong and diversified line-up of products and partnerships, and aims to leverage its IPs (Assassin’s Creed, Rainbow Six, The Division, Far Cry, etc.) into other sectors such as cinema, television series, and merchandising
Investment Thesis
- The video games sector offers an appealing growth outlook (growing audience, next gen consoles, greater monetization), and Ubisoft is well-positioned to ride these trends through its broad portfolio of franchises.
- There is a sizeable catch-up potential with U.S. peers when it comes to in-game monetization (player recurring investment), profitability, and FCF generation as Ubisoft moves towards live-services video games.
- While it could experience some setbacks before finding the right formula, it can be expected that Ubisoft will successfully breakthrough in the F2P area as it did with the multi-player shooting segment in the past.