Vivendi Se · EURONEXT:VIV
Vivendi — Vivendi Games — Non-Deal Roadshow (June 2006)
40 slides from Vivendi's roadshow presentation, June 2006
Slide 1: Introduction to Vivendi Games, June 2006
Introduction to June 2006 Bruce Hack – CEO, Vivendi Games Mike Morhaime – President and Co-Founder, Blizzard Entertainment Jean-Francois Grollemund – Chief Financial Officer, Vivendi Games Nichol Bradford – Global Director of Strategic Growth, Vivendi Games Important Notice: Investors are strongly a
Slide 2: Agenda
Agenda Executive Summary Group Overview Business and Strategy Financial Performance Vivendi Games 2006 STRICTLY CONFIDENTIAL. This document and the information contained in it are the property of Vivendi Games, Inc. and may not be used, copied or distributed in any form without its express p
Slide 3: Executive Summary
Executive Summary Vivendi Games: A global publisher with a #1 position in PC online, a growing traditional PC/console business, and newly built positions in high growth mobile and online casual segments. Fast growing global games market A differentiated strategy driven by creativity and designed
Slide 4: Group Assets
Group Assets Vivendi Games has a global footprint, a strong history of franchise success, and a pipeline of world leading licensed IPs. Global footprint: 15 countries 2500+ employees Franchise successes: World of Warcraft from Blizzard (owned -- over 6.5MM customers today) Crash Bandicoo
Slide 5: Vivendi Games: A Performance Turnaround
Vivendi Games: A Performance Turnaround 2005 marked Vivendi Games’ return to profitability, based on Blizzard’s recurring revenue base and the repositioning of Sierra; at the same time, the group invested heavily in an expanded flow of high quality future products. Blizzard launched WoW as #1 MMOR
Slide 6: Vivendi Games: Strategic Positioning
Vivendi Games: Strategic Positioning The global games software market is the fastest growing entertainment sector with its biggest new opportunities in PC online, console online and mobile; console will remain the largest category, but of decreasing importance. Software Software (€ BN) (€ BN) 30 27.
Slide 7: Group Structure
Group Structure Vivendi Games has a new organization to capture growth. Driven by 4 creative divisions: Positioned against the industry’s biggest opportunities Focused on innovation Intimately close to consumers With own creative and marketing teams But centralized when size matters Shar
Slide 8: Vivendi Games: A Diversified Growth Model
Vivendi Games: A Diversified Growth Model Division 1991 1979 2006 2006 PC Online Console PC Online Mobile PC Retail PC Retail Console Online Console Handheld Product Over €50MM MMORPG €10 – 13MM Next Gen €1.5 – 4MM PC/Console €250-320K Mobile Games Development Over €10-13MM Next Gen Console Online –
Slide 9: Vivendi Games: Benefits from Vivendi
Vivendi Games: Benefits from Vivendi Vivendi is a shareholder with judgment and patience – prepared to invest to drive returns across media and telecom experiences. Media Telecom 100% 100% 100% 20% 56% 51% Pay-TV / Music Video Networks / Cable Mobile / Mobile / Film Games Film / Parks Fixed line Fix
Slide 10: Vivendi Games 2006
Vivendi Games 2006 STRICTLY CONFIDENTIAL. This document and the information contained in it are the property of Vivendi Games, Inc. and may not be used, copied or distributed in any form without its express prior consent. © Vivendi Games, Inc. 2006 10
Slide 11: Blizzard: Competitive Position
Blizzard: Competitive Position Blizzard: “Not only have Blizzard’s games sold more than 40 million copies over the last 11 years, but they have also inspired a level of enthusiasm that may most closely resemble an opera audience’s rapturous devotion to a renowned diva.” (New York Times – Seth Schies
Slide 12: World of Warcraft: What is it?
World of Warcraft: What is it? World’s #1-selling “massively multiplayer” online role-playing game [MMORPG] Player Experience WoW Customers (Millions) A “virtual reality” fantasy where thousands of players embark on adventures and discover a 7,000 world together inside the rich Warcraft univer
Slide 13: World of Warcraft: A Community
World of Warcraft: A Community Families connected… “Roger Fouts, a professor at Central Washington University, plays World of Warcraft in an online team with his son, daughter and son-in-law. While they play, the family members can catch up on comings and goings. Recently, Fouts's son signed on to t
Slide 14: World of Warcraft: What is the Economic Model?
World of Warcraft: What is the Economic Model? NORTH AMERICA EUROPE KOREA CHINA TAIWAN Launch Date Nov-04 Feb-05 Jan-05 Jun-05 Nov-05 Direct or Local Partnership Direct Direct Direct The9 Softworld Primary Consumer Entry Point Retail Package Retail Package Game Room Game Room Game Room Download Clie
Slide 15: World of Warcraft: What is the Lifecycle?
World of Warcraft: What is the Lifecycle? A long lifecycle for WoW is near certain given (1) powerful industry trends, (2) advantages that accrue to highly successful MMORPGs, (3) its high standard for content, design and quality versus competition, and (4) the sheer number of largely untapped futur
Slide 16: WoW Growth Drivers: Retention
WoW Growth Drivers: Retention New Content Pipeline – Blizzard’s most important strategies are to continually provide new content so that the world constantly changes and the adventure always evolves; and by so doing give players compelling new reasons to engage, and create significant competitive
Slide 17: WoW Growth Drivers: Acquisition
WoW Growth Drivers: Acquisition Lowering Barriers to Trial – The first best acquisition strategy is to give more convenient, free access to sample the World of Warcraft experience; efforts are just beginning. Expanding Channels via retail trial edition, digital download, original equipment manuf
Slide 18: WoW Growth Drivers: Footprint Expansion
WoW Growth Drivers: Footprint Expansion More languages, regions, platforms and ancillaries are under consideration and, if desirable, will be pursued. Current Markets Pending Expansion Potential Future Expansion Languages English Spanish Japanese Korean Thai French Portuguese German Russian Simplifi
Slide 19: Blizzard Growth Drivers: Franchise Potential
Blizzard Growth Drivers: Franchise Potential FRANCHISE / MASSIVE MULTIPLAYER ONLINE PC/MAC CONSOLE PLATFORM World of Warcraft (2004) Warcraft: Orcs and Humans (1994) Warcraft II: Tides of Darkness (1995) WARCRAFT Warcraft II Expansion: Beyond the Dark Portal (1996) Warcraft III: Reign of Chaos (2002
Slide 20: Vivendi Games 2006
Vivendi Games 2006 STRICTLY CONFIDENTIAL. This document and the information contained in it are the property of Vivendi Games, Inc. and may not be used, copied or distributed in any form without its express prior consent. © Vivendi Games, Inc. 2006 20
Slide 21: Sierra: Successful Products and Franchises
Sierra: Successful Products and Franchises “[Hulk] Quite possibly the best superhero game to date.” (Electronic Gaming Monthly) "With… many moments that will have you jumping out of your seat, F.E.A.R. stands as one of the best shooters of 2005.” (gamespy.com) “50 Cent Bulletproof makes GTA look lik
Slide 22: Sierra: Successful Products and Franchises
Sierra: Successful Products and Franchises “Vivendi Universal’s bandicoot crashes the party-game genre with a 40- minigame multiplayer barn burner on the Nintendo DS.” (Nintendo Power) “Ice Age 2: The Meltdown is a fun.. The gameplay is enjoyable, … and the graphics are top notch… If you liked the f
Slide 23: Sierra: Repositioning and Editorial policy
Sierra: Repositioning and Editorial policy Opportunity – Console remains the industry’s center of gravity for global, mass-market, multi- platform franchises Repositioning – Sierra accordingly was rebuilt with its own internal development teams and top external studios Successful development a
Slide 24: Sierra Growth Drivers: Quality
Sierra Growth Drivers: Quality Sierra is building its “traditional” business on quality at the newly integrated internal studios and with an all-star team of external developers. Internal Developers Genre Specialty Acquisition Date Number of Teams Expandable Radical Entertainment Cross Genre Mar-0
Slide 25: Sierra Growth Drivers: Licenses
Sierra Growth Drivers: Licenses Sierra is also driving growth through intimate relationships with key IP holders, and a wealth of potential original IP from talented internal producers and developers. External IP Sourcing NBC Universal Scarface (06) Studios Miami Vice (06) Universal Music 50
Slide 26: Sierra Growth Drivers: Multiplatform Releases
Sierra Growth Drivers: Multiplatform Releases Sierra, prudently, is investing in a larger, more multiplatform slate for 2008 and beyond. Average Average Average Year Number of Platform Number of Releases Breakdown Skus* 11 Console 2006 - 2007 10 8 PC 31 11 Handheld 28 Console 2008 - 2009 15 9 PC 48
Slide 27: Vivendi Games 2006
Vivendi Games 2006 STRICTLY CONFIDENTIAL. This document and the information contained in it are the property of Vivendi Games, Inc. and may not be used, copied or distributed in any form without its express prior consent. © Vivendi Games, Inc. 2006 27
Slide 28: Sierra Online: What is it?
Sierra Online: What is it? Blizzard dominates Long Session online gaming and Sierra Online can dominate the remaining high-growth online gaming sectors by extending Vivendi Games’ internal best practices: Online experience Infrastructure knowledge base Guest management Content quality Glob
Slide 29: Sierra Online Growth Drivers
Sierra Online Growth Drivers Initial releases focus on original, catalog and licensed short-session games (West); In mid-session the focus is on FreeStyle (West) and Crash (China). Releases Other Growth Drivers Megaforce (Short - XBLA) Broadband Growth 2006 3D Ultra MiniGolf (Short – XBLA, PC) M
Slide 30: Vivendi Games 2006
Vivendi Games 2006 STRICTLY CONFIDENTIAL. This document and the information contained in it are the property of Vivendi Games, Inc. and may not be used, copied or distributed in any form without its express prior consent. © Vivendi Games, Inc. 2006 30
Slide 31: Vivendi Games Mobile: What is it?
Vivendi Games Mobile: What is it? A new division to tap a market estimated to grow 30-35% CAGR during 05-10. 2006 2009 Current Status Overall Goal Top 30 player Top 5 player $5MM revenues $200MM at consumer level in the West Launch 12-14 titles Launch 24 titles per year 9 back catalog titles Key Dri
Slide 32: Vivendi Games Mobile Growth Drivers
Vivendi Games Mobile Growth Drivers Releases Other Growth Drivers 2006 2007 Caesar 2D Growth in overall number of mobile MACH 2D / 3D phone subscribers, especially in Dr. Cortex developing world Crash Boom, Bang! Spyro The Legend 8 Sim Ships Younger age profiles for mobile use, Eragon especially
Slide 33: Financial Performance
FINANCIAL PERFORMANCE Vivendi Games 2006 STRICTLY CONFIDENTIAL. This document and the information contained in it are the property of Vivendi Games, Inc. and may not be used, copied or distributed in any form without its express prior consent. © Vivendi Games, Inc. 2006 33
Slide 34: Financial Performance: Increasingly Strong
Financial Performance: Increasingly Strong Three steps towards increased financial performance, fueled by successive layers of profit as current investments mature. 2005 – Turn-around completed Blizzard’s WoW striking success and improved performance at Sierra delivers EFO at 41M€ while financin
Slide 35: 2006 Financial Guidance: Key Points
2006 Financial Guidance: Key Points Revenues – at + 12 to 15% vs. 2005 (above market trends) Driven primarily by the continued increase of Blizzard’s WoW global customer base with a major uplift from the Burning Crusade Expansion pack Sierra PC/ Console business also expected to grow in 06, a
Slide 36: Financial Performance: Q1 2006 On Track
Financial Performance: Q1 2006 On Track Q1 06 – all drivers are on track with Revenues up 18%, EFO 2X vs LY05 Blizzard’s WoW performance increasing worldwide Solid performance of Ice Age 2 in all markets, strong backlist sales Full Year Objectives - on the high end of the guidance, with cont
Slide 37: Key Take Aways: Business Models
Key Take Aways: Business Models A unique product mix with > 50% recurring revenues from on-line subscriptions in high growth sectors: Driving regular revenue flows and stable EFO, good visibility, low volatility Thanks to the increasing portion of subscription revenues (currently WoW, tomorrow
Slide 38: Conclusion
Conclusion Vivendi Games is poised to enter the top tier of global games publishers. A fast growing market – with huge opportunities in online and mobile segments A differentiated strategy aimed to redefine competitive position – through prudent investment in four well purposed and resourced cre
Slide 39: Investor Relations Team
Investor Relations Team Daniel Scolan Executive Vice President Investor Relations +33.1.71.71.14.70 daniel.scolan@vivendi.com Paris New York 42, Avenue de Friedland 800 Third avenue 75380 Paris cedex 08 / France New York, NY 10022 / USA Phone: +33.1.71.71.12.33 Phone: +1.212.572.1334 Fax: +33.1.71.7
Slide 40: Important Legal Disclaimer
Important Legal Disclaimer Vivendi Games is a subsidiary of Vivendi, which is quoted on the NYSE and on Euronext Paris SA. This presentation contains “forward-looking statements” as that term is defined in the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements are n