Morningstar | Ubisoft Will Continue to Benefit From Its Games as a Service Business Model
Ubisoft is the third-largest independent video game publisher and owns some of the largest and well-known video game franchises, including Assassin’s Creed, Far Cry, and Rayman. We believe the firm will consolidate its leading position by developing compelling new versions of its existing franchises and by creating new experiences, as it did with Watch Dogs in 2014 and hopes to do with For Honor. We expect Ubisoft to continue benefiting from creating games for the current generation of consoles (Xbox One, PlayStation 4, and Switch), the ongoing revitalization of PC gaming, and the growth of mobile gaming.Ubisoft has capitalized on the industry's shift toward a bifurcated market consisting of major AAA blockbuster titles on one side and smaller independent games on the other side. Ubisoft generally focuses on the higher end of the market, using its capital to fund the higher-budget blockbusters and its marketing advantage to support its titles across multiple advertising platforms. Over the last 10 years, the firm has established its blockbuster franchises such as Assassin’s Creed and Far Cry, while creating newer ones such as Watch Dogs. We expect the company to continue to invest in new intellectual property and to fund the development via sequels and additions to its current core brands.Like its peers, the firm is focused on engaging users beyond the initial game sale via extending the monetization window by expanding the use of multiplayer options and releasing downloadable content, or DLC. Online multiplayer games or game modes lead users to develop social networks, thus encouraging player loyalty via either informal friendship networks or actual teams/clans. Both methods encourage gamers to hold on to the original game longer than in previous generations and also provide an income stream from consumers who purchased the game secondhand. Ubisoft is one of the only major video game publishers that is placing a major bet on virtual reality. While we don't expect VR to take off in near future, Ubisoft is the best-situated of the three major publishers to benefit if it takes off more quickly than we expect.Ubisoft Entertainment is an international independent developer, publisher & distributor of video games. Co. centers its business activities on developing, publishing & distributing video games for portable & home consoles, the PC, smartphones & tablets in both physical & online formats: high-definition with games for Xbox 360, PlayStation®3 & PC; casual with games for Nintendo®, KINECT & PlayStation®3 Move; and online for on-line games. Co.'s catalogue includes various types of games: Action/Adventure, Shooters, Sports, Strategy, Simulation, TV and Movie licenses, Games for everyone and Driving. Co.'s trademarks include Assassin's Creed®, Rainbow Six® Vegas 2, and Rayman Raving Rabids®.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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