Businessmodel of Ubisoft

Customer Segments

Ubisoft has a mass market business model, with no significant differentiation between customers. The company produces and distributes software for people of all ages and backgrounds.

Value Proposition

Ubisoft offers three primary value propositions: accessibility, cost reduction, and brand/status.

The company offers accessibility by providing a wide variety of options. It acquired numerous video game studios in the past two decades, enabling it to build a large library of strong and popular titles.

The company reduces costs by providing deals. Customers who join the Ubisoft Club earn “units” based on the extent of their game play. The units can then be used to earn shop discounts, as well as over 600 rewards in 90 games and over 200 badges and avatars.

The company has established a strong brand as a result of its success. It bills itself as the third largest independent video game company in the world. It has also developed titles for several acclaimed and popular video game franchises, including “Assassin’s Creed”, “Prince of Persia”, and “Rainbow Six.”

Channels

Ubisoft’s main channels are physical retail stores and online retail websites (its own and those of third party distributors). The company promotes its offering through its social media pages, online and TV advertising, and attendance of conferences.

Customer Relationships

Ubisoft’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website provides answers to common questions. That said, there is a personal assistance component in the form of customer support for those with Uplay accounts and a community element in the form of peer forums.

Key Activities

Ubisoft’s business model entails designing, developing, and distributing software titles for its customers; it also distributes titles by third parties.

Key Partners

Ubisoft relies on the following companies for physical and/or online distribution of its titles:

• Amazon
• Best Buy
• Direct2Drive
• Good Old Games
• Gamersgate
• Steam
• Gamestop
• Gametap
• GreenManGaming
• Gametreemac
• Macgamestore
• Nuuvem
• Ponto Frio
• Full Games
• Wal-Mart
• Busca
• DLGamer
• Gamebillet
• GameFan Shop
• Gamesrocket
• Costco
• Humble Bundle
• NewEgg
• JeuxVideo
• Gamesplanet
• Origin
• Playspot
• Saraiva
• Starmedia ### Key Resources

Ubisoft’s main resource is its software development staff, which produces its titles. The company claims to have the second-largest number of in-house development employees in the world. It also relies on sales and customer service staff for promotion and support, respectively.

Cost Structure

Ubisoft has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is research and development costs, a fixed expense. Other major drivers are cost of sales, a variable expense, and marketing and administration, both fixed costs.

Revenue Streams

Ubisoft has three revenue streams:

Software Sales – Revenues generated from the sale of gaming software

Licenses – Revenues generated from the issuing of licenses for software

Services – Revenues generated from development and publishing services provided on behalf of third parties