Sustained and controlled growth
If one were to try and describe in one word Infogrames’ performance during fiscal 2000, at the close of the millennium, that word would be “transition”, as in: • the transition from a company that was essentially European to a global corporation, through the acquisition of GT Interactive Software in the United States; • the transition from now outmoded earlier-generation hardware to a spectacular new interactive technology; • the transition from a limited installed base to software designed to operate on all interactive hardware on which games can be played. These transitions have repeatedly shaken up our business, in particular during the last fiscal quarter, when they had an adverse impact on our less-than-ideal financial performance. Nevertheless, Infogrames has pursued its overall business strategy of offering a line of high-quality games for all. In order to do this on a sustained basis, the Group must have expertise in the interactive that will increase Infogrames’ worldwide market share. Henceforth known as Infogrames, Inc., the new affiliate brings under a single roof all of the Company’s interests in the US. It has been restructured in less than eight months and is headed by a new management team made up of experienced professionals. It now operates along the lines that have proved successful at Infogrames. • Production projects of more than 100 million euros included expenditures to expand our catalog based on existing formats, but mainly to design software for next-generation consoles, Sony’s PS2, Microsoft’s Xbox and Nintendo’s Gamecube and Game Boy Advance. Eight new games are scheduled to be released this year for the PS2 console. Twelve more are being developed and are expected to be in stores when the Xbox becomes available, and another eight games are in progress for Nintendo systems. Infogrames’ 2000/2001 catalog includes more than 80 new games for all formats. It combines new and existing Company phones, has been financed internally with investments of 7 million euros for the year. It is expected to provide significant alternative areas of expansion for our business in future years. Thanks to these capital projects, Infogrames now has a global publishing and distribution structure and a wellstocked catalog of products for current and future interactive systems. In its new form, the Company is ready to take advantage of the expected turnaround in the market and has started fiscal 2001 full of confidence and optimism, intent on returning to a situation of significant and sustained growth. Beyond that, during the transition period, the Company demonstrated that it had what it takes to be a growing international corporation, namely: the ability to stay focused on ambitious business objectives while limiting exposure to risks. When negotiating acquisitions or making production decisions, Infogrames management has always sought to act in a
WONDER
FUL WORLD
technology required to design cuttingedge games, as well as access to distribution networks to reach the broadest possible consumer base. These two objectives provided a basis for the investments made this year. • The acquisition of GTIS in November 1999 restores the balance in Company sales between Europe and the United States. It brings on board an efficient US distribution network and a set of licenses products, such as Alone In The Dark 4, Driver 2, Unreal Tournament, Deer Hunter, etc. with products based on international licenses, such as Looney Tunes, La femme Nikita, the Le Mans 24 hour auto race, etc., and has games for all market segments, which reduces overall publishing risks. way that was consistent with the creation of value. This has enabled us to become Europe’s leading interactive entertainment company and bodes well for our next challenge, which is to become a world leader in our market. The race is on and Infogrames is on its way to a profitable first fiscal year in the new millennium. Bruno Bonnell Chairman and Chief Executive Officer • Research into new interactive media, including the Internet, interactive television and cellular
IT’S A
Because everyone loves to play, Infogrames creates interactive games for all. The Infogrames catalog is consumer oriented and covers all market segments. It includes original hit titles such as Alone In The Dark, V-Rally, Unreal Tournament, the Humongous games, Test Drive, Deer Hunter and Driver, which has sold more than 4 million copies, as well as games based on high-quality international licenses, including Mission Impossible, Looney Tunes and Ronaldo, the cartoon characters “Astérix” and “The Smurfs”, as well as the Le Mans 24-hour auto race.
Because everyone loves to play, Infogrames designs games for the full range of interactive systems: - Game Boy for children - PC and Playstation for others - next-generation consoles, including Sony’s PSX2, Microsoft’s Xbox and Nintendo’s Gamecube and Game Boy Advance; - new Internet technologies, WAP for PDAs (personal digital assistants and cell phones), in-flight interactive entertainment (soon also in cars) and interactive TV with high-speed data transfer, etc.
Sales of interactive game software have risen by 20 percent a year on average over the past four years, although they leveled off somewhat in 2000 while consumers waited for next-generation consoles to arrive. The interactive games sector now ranks second worldwide in terms of marketing budgets for the next two years, helped by the release of Sony’s PS2
FASTER THAN THE MARKET.
Over that period, Infogrames’ revenue rose by 70 percent annually, thanks to a corporate strategy that combined internal growth with acquisitions. next-generation PlayStation console, the entry of a major new competitor into the console market with Microsoft’s Xbox and the announcement by Nintendo of the release of its Gamecube and Game Boy Advance systems.
Since being acquired by Infogrames, the US company has been entirely reorganized and management problems have been resolved. This has been accomplished by: - completely overhauling the management team and hiring executives from leading consumer entertainment firms, - cutting down on the distribution
Infogrames Inc.
Infogrames has gained entry to the US market. Infogrames’ expansion into the United States was a key step in the Company’s overall business strategy. Last year, Infogrames became a top-tier publisher of interactive entertainment software when it acquired a 70-percent interest in GT Interactive Software for USD 135 million. The US company owns rights to such best-selling games as Driver, Deer Hunter, Unreal Tournament, a line of children’s entertainment software from Humongous Entertainment, along with licenses such as Blues Clues (Nickelodeon) and Harley-Davidson. It is a leading producer of games for Macintosh and has a distribution network that provides it with direct access to some 20,000 retail outlets in the United States.
of third-party products, - outsourcing logistical functions, - extending the product line to include all formats and worldwide distribution. The final step in the restructuring effort occurred on October 3, when Infogrames North America, the Company’s US branch, merged with GT Interactive to form Infogrames Inc. (Nasdaq IFGM). The Company increased its equity interest to 88 percent through a stock issue and arranged for its affiliate to have access to the financial resources it needs to grow.
Infogrames arrives on the US Scene
across the game nation
Europe
Jean Claude Larue, Chairman of Infogrames Europe Infogrames has improved its global structure through the absorption of the GT Interactive Software business and the appointment of Jean-Claude Larue as chairman of Infogrames Europe. Mr. Larue supervises all operations in Europe and Australia and participates in corporate business strategy discussions. Operations : Infogrames Entertainment (principal office), Lyon, France Infogrames Europe, Paris and Lyon, France Infogrames France, Lyon Infogrames UK, London Infogrames Sheffield House, Sheffield, England Infogrames Benelux, Eindhoven, The Netherlands Infogrames Deutschland, Frankfurt, Germany Infogrames Spain, Madrid Infogrames Italia, Milan, Italy Infogrames Portugal, Estoril Infogrames Nordic, Spanga, Sweden Infogrames Hellas, Athens, Greece Infogrames Israel, Tel Aviv
Unites States
INFOGRAMES Inc.
Created through the merger of Infogrames North America and GT Interactive Software, this new entity brings all of the Company’s US production, publishing and distribution business under a single entity with: - a staff of 850, - management that includes senior executives with a proven record in the field of interactive entertainment software, - a distribution network with 20,000 outlets, - a catalog filled with successful franchises (Driver 2, Unreal Tournament, Oddworld Munch, Test Drive, the Humongous Entertainment collection), - a focus on mass-market distribution.
PARADIGM
Infogrames improved its opportunities for expansion in the US with its July 2000 acquisition of this major producer of game software for nextgeneration consoles, including for the Nintendo’s Gamecube.
Canada
Den-O-Tech Interactive
Infogrames has acquired a controlling interest in Den-O-Tech (DTI), which specializes in in-flight entertainment. The company is now known as DTI Infogrames and is intended to become the principal supplier of interactive content for in-flight and other embedded entertainment systems (on trains, boats, cars, etc.). Operations Infogrames Inc. (principal office), New York, NY I-Stars, Los Angeles, CA Infogrames San Jose, San Jose, CA Paradigm Entertainment, Dallas, TX Humongous Entertainment, Seattle, WA Wizardworks & MacSoft, Minneapolis, MN Legend Entertainment, Virginia DTI Infogrames, Montreal, Canada
Asia
Operations Infogrames Melbourne House, Melbourne, Australia Ozisoft (distribution for Asia and the Pacific), Sydney, Australia
Joint Venture with Hudson Soft Co.Ltd
After setting up a subsidiary in Japan in January 2000, Infogrames expanded its operations in Japan in October 2000 by forming a joint venture with the Hudson Soft publishing company, consistent with the Company’s global growth strategy. The new entity is known as Infogrames Hudson K.K. and its head office is in Tokyo. Its main objective will be to promote the local development of games for next generation consoles for the Japanese market. Operations IInfogrames Japan KK, Tokyo Infogrames Hudson KK, Tokyo.
The world is going digital. Telecommunications are becoming digital and all media and data transmission systems are becoming interactive. The Internet is taking advantage of the rapid rise in data transfer rates to become the single focal point for access to information and entertainment. WE ARE ENTERING THE ALL-DIGITAL ERA.
In keeping with the Company’s policy of issuing products for all formats, Infogrames already has a line of games for the new media, in particular iTV, third generation cell phones, PDAs and in-flight entertainment systems. By making games based on original or licensed themes available for these new media, Infogrames is contributing to “Global Gaming”, when games will be accessible by anyone, anywhere, and anytime, regardless of location, time or even type of terminal.
’CAUSE EVERYONE IS A GLOBAL GAMER
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