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Ubisoft Q1 Sales Slide 51 Percent, Major Games Delayed
Ubisoft Q1 Sales Slide 51 Percent, Major Games Delayed
July 27, 2009 | By Kris Graft

July 27, 2009 | By Kris Graft
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More: Console/PC



Ubisoft said Monday that it missed fiscal Q1 guidance by 12 percent, reporting a 51 percent drop in sales to €83 million ($113.71 million) for the quarter ended June 30 on slow sales of Nintendo DS and back-catalog PlayStation 3 and Xbox 360 games, and a market that was "poorer-than-anticipated."

Ubisoft chief Yves Guillemot said in a statement, "We are currently experiencing a very sharp slowdown in our sales for Nintendo DS as well as sales of back-catalog titles, in the context of a market that is tougher than anticipated. This will have a significant impact on our first-half showing."

The drop in sales led the France-based publisher to reduce its Q2 2009-2010 sales guidance to €80 million ($109.60 million), which would represent a year-over-year drop of 54 percent. Ubisoft previously forecast Q2 sales of €130 million ($178.10 million).

The publisher said it is only releasing a few games during Q2, including a new Teenage Mutant Ninja Turtles game for Wii and PS2, the multiplatform Cloudy With A Chance Of Meatballs, and various casual titles.

Ubisoft also reduced full-year forecasts to €1.04 billion ($1.42 billion) with current operating income representing at least 7 percent of sales. Previously, the publisher forecast sales of around €1.1 billion ($1.507 billion) and at least 11 percent of sales.

Aside from the expected poor showing from the first half of the year, contributing to the lower forecasts are the delays of Splinter Cell Conviction and Red Steel 2 to the fourth quarter of the year (ending March 2010) from the third quarter.

In addition, Ubisoft delayed the next Ghost Recon and I Am Alive from fiscal Q4 into the next fiscal year.

But Ubisoft said recently released games Call of Juarez and Anno were in line with expectations, and its Wii market share rose during Q1.

"We are disappointed that we have to postpone the release of several major games but we consider that this choice is the best one in the long-term interests of Ubisoft," Guillemot added. "...The excellent response to our games at E3, as well as the high buzz generated for titles such as Assassin's Creed 2, Splinter Cell Conviction and Avatar, reinforce our belief that the company can achieve strong growth in the second half of the fiscal year."

[UPDATE: In the Ubisoft conference call following the results, as noted by Kotaku, Guillemot commented that he believed DS game piracy was a major source of the slowness, suggesting: "Piracy is strong so we are working to put new figurines and new elements in the boxes that will change that in the future… for example in Europe we have the same market share in DS this year as last year."

The Ubisoft boss separately commented that "Altogether on console... on the PC the piracy is quite a lot", adding: "We see a different attitude toward piracy in the U.S. than Europe. We did a survey that said our consumers will be more willing to buy products than pirate them."]


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Comments


Tyler Peters
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The Splinter Cell move doesn't surprise me, I suppose. The stuff at E3 looked good, but there wasn't much of it. And then they showed the same thing again on some behind the game vid they put on Game Trailers. Made me wonder if they had finished anything else in the game.

Hope Avatar is good, movie is looking very cool.

Maurício Gomes
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Baaah... Here on gamasutra they don't posted the part where Yves blamed piracy for lower sales instead of recession...

Simon Carless
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Helder, we've added that comment - I believe Ubisoft blamed the economy in their official release, but Guillemot's press conference remarks added piracy as another factor.

Steven Ulakovich
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This just adds to the shocking amount of games that have slipped to 2010 dates since E3 ended.



More shocking to me is the upfront claim that piracy is a primary reason for such a large drop in their DS revenues, and considering that the bulk of their DS catalog is their "tween" series', it means nothing is safe in these tough times.

Chris Melby
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Wow, since when did DS shovelware get pirated?

Maurício Gomes
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Making a survey asking if a guy want to pirate your game is the same as the police asking a guy if he smoke pot...





But anyway, the view that PC is more pirated is totally distorted, console is MUCH more pirated (on São Paulo, for each pirated PC game, I see 10 for PS2, 7 for Wii and 4 for 360... For some reason DS pirated games are not around on the streets... I guess that selling a pirated cartridge is harder than sellinc a CD). This of course has the nasty side effect that several publishers and companies (including sadly Microsoft) are dropping PC support, WHEN they make a PC game, they make a awfull port (like assassins creed with bizarre console-like controls on the keyboard, or Capcom's Lost Planet that the tutorial screen show a photo of a XBOX 360 controller and make no mention about what keyboard key you are to press... I had to press all keys on the keyboard to figure what key was the "A" on xbox to be able to exit the screen...), then they complain that those games don't sold, blame piracy, and the circle continues...



But really, sometimes Ubisoft disappoint me, they are more and more focused on shovelware (not only DS, but the incredibly dumbed down Prince of Persia instead of offering good difficulty levels for example or games with awesome graphics, animation, story, sound, gameplay... but are boring, aka: Assassins Creed after you saw all mission variations and you are not into just running around aimlessy on buildings) and they INSIST in making DRM, get bashed, remove DRM, put it back... I think that their new DRM that they promised (see Kotaku), will get cracked, legal players will refuse to buy the game with DRM, and Ubisoft will claim that the lack of sales is piracy again...

Hayden Dawson
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Sadly, I can comment that at least at my store, we've seen an increase in the tween/kid crowd directly asking about those carts that 'you can put all your games on' or 'that have 100s of games on them'. All we can do is smile and note that we are 'not aware' of such things, but the word is getting out to them some way.

Roberto Alfonso
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Under a recession, people try to reduce costs. In certain areas, it includes buying second marks. For gaming, it means piracy. The risk (not counting the losses the publishers and developers have right now) is that those who use piracy to keep their entertainment level don't go back to the legal road once their situation improves.



Regarding Hélder's point, I wonder if it is just more visible because there are more console games released than PC games. A pirated console game requires nothing other than the modified console. A computer game requires also a computer able to run the game (take Grand Theft Auto 4, for example). In any case, the point is local to Brazil, and I can make two quick conclusions: Brazil represents very little for Ubisoft since I am not even sure they have a local distributor there (and the volume does not compare with Europe or North America), and it is not possible to translate what happens there to other markets (which I am guessing Guillemot was referring to).

Martin Danger
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I confess that in an effort to save money, lately my purchases have been limited to the Steam Weekend Deals. The last PC game I paid full price for was Dawn of War 2.

Maurício Gomes
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@Roberto



Indeed, it was a local example, but from what I heard it is reflected on other countries... The main reason that console has more piracy is that it is far easier to pirate stuff for it (I mean, for the end user, not the crackers...), for a PS2 for example, you buy one with the modchip already installed (it is not hard to find...) or buy one and search for a modchip company, and then you just insert any PS2 DVD and it work. No need to go into cracks, see if configuration work, and whatnot...



Also I don't believe either that Ubisoft sales here are important, but they have a "shovelware" studio here (ie: that studio they openly said that its market is teenage girls, they do some of those girly "casual" DS games).



But it is not from now, it is since a long time ago I see piracy blaming, and few companies actively acting (like Valve ^^)





And yes, it is hard to "de-convert" from piracy, here in Brazil the piracy rised after a stupid government tax kicked in (ie: games and consoles are taxed 273%), and now it got entrenched into the culture of the people to just pirate stuff, and the developer not getting money is collateral damage, the war is against the taxes (yes, people advocate piracy as a mean of not paying taxes... and in fact, it work)

Andrei Vasilescu
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I actually think that a game/application should not cost more than 25$-30$ (at max). This way, anyone could afford 2-3 games per month and the piracy level will drop. At the moment, i prefer to download games instead of buying them because of the high costs (40-50 euros in Romania where the minimum wage is 150 euros).



Until the game producers accept this, i will continue to pirate the games i play and i will advise anyone else from my circle of friends to do the same.

Peter Dwyer
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This kind ofthing amazes me. Does it really not occur to these idiots that there is a recession on and people are simply not prepared to pay £49 or $60 for a game anymore. I know the stupid analysts said that the games industry was recession proof but, come on did anyone seriously believe that!



Now here in the UK we have Activision trying to charage 10 pounds more for modern warfare 2 as if they simply haven't been on earth the last 2 years!

David Peterson
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Games have been overpriced for years. When they're at AU$110 for a new game, you think really hard when deciding which one to buy. The harder you have to think about buying a game, the less likely you are to buy any game at all. On the other end of the scale you have iPhone games at AU$1.19 and you think for about 5 seconds before risking your well earned cash.



Obviously full PC/Console games need to cost more than a buck, but if you can get your prices down towards AU$60 or even AU$70, I have to think less, and might even buy another game - even though the combined price is more than the $110 I pay for one game now. Less people thinking hard about buying = more sales = higher revenue.



But what do I know? I'm just a customer...

Urs Schaub
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@Hélder Gomes Filho



At least CAPCOM did learn something(At least if it's from their inhouse Devteam), look at SFIV(granted a Controller is still better suited for beat em ups than Keyboards, but playable. ;) )

After i played SFIV for some hours i have to admit, that's the right way to do a good Port, and judging from the Gamespot HandsOn on Resident Evil 5 and the Benchmark Demo, i think Resi5 will do fine in this regard.



I hope the others will learn from CAPCOM, GRIN did not(And they shoul'd know it better.*)



*In BionicCommando you play the Tutorial and they slap the x360 pad icons in your face even there is none plugged in.(But the Game mechanics/controls are fine else, imo.)



And yeah the pricing in some regions are ridiculous, and then comes Activision with their smartass tactic, but i guess the majority will still pay the price and give Activision and others a reason to hold that course.

Urs Schaub
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Oh and then comes a analyst and thinks that is a great move, i don't know, but i'll highly doubt that they will throw the money against better quality Games to hold a Franchise up.


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