Once one of the big 4 of North American publishers alongside Take Two, EA, and Activision, Ubisoft has gone on a legendary fall from grace that features hostile takeovers, privatising founders, and foreign white knight investors.
Thank you, your clearly written post is very informative. I would love to read more about your take on U. I would like to know how the tax credit for qualified labour (up to 37% of salary) play in the calculation of R&D expenses. Is it possible that the actual R&D expenses are even higher that what you are showing here.
Great question. You’re completely right that this paints Ubisoft’s issue in a worse light. FCF doesn’t change, since the credit is a real cash refund already reflected in the numbers. What changes is Ubisoft’s development output per Euro. The R&D intensity becomes a bigger red flag as the credit pays on labor regardless of the outcome. Even worse is the restructuring implications, cutting a headcount in Montreal is worth much less than cutting a headcount in Paris.
Thank you, your clearly written post is very informative. I would love to read more about your take on U. I would like to know how the tax credit for qualified labour (up to 37% of salary) play in the calculation of R&D expenses. Is it possible that the actual R&D expenses are even higher that what you are showing here.
Great question. You’re completely right that this paints Ubisoft’s issue in a worse light. FCF doesn’t change, since the credit is a real cash refund already reflected in the numbers. What changes is Ubisoft’s development output per Euro. The R&D intensity becomes a bigger red flag as the credit pays on labor regardless of the outcome. Even worse is the restructuring implications, cutting a headcount in Montreal is worth much less than cutting a headcount in Paris.
Thank you. This is fascinating. Keep up the good work.