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Ubisoft Posts Losses As  Assassin's Creed II  Nears 9 Million

Ubisoft Posts Losses As Assassin's Creed II Nears 9 Million

May 18, 2010 | By Kris Graft

May 18, 2010 | By Kris Graft
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French Splinter Cell publisher Ubisoft recorded a decrease in sales and a loss for the fiscal year ended March 31, 2010, blaming worldwide economic downturn.

The company on Tuesday recorded a 17.7 percent drop in annual sales to €871 million ($1.08 billion), and posted a loss of €43.7 million ($54.02 million).

Ubisoft CEO Yves Guillemot said in a statement, "The global economic crisis had a pronounced impact on the video game industry in 2009, which contracted by nearly 10 percent year-on-year."

"Ubisoft’s sales were hit particularly hard, falling 18 percent over the full year despite a stabilization in the second half of the year, when figures came in on a par with the corresponding period of 2008-09," he added.

Fourth quarter sales were €200 million ($247.32 million), slightly higher than guidance but lower than the €206 million ($254.76 million) recorded for the same quarter a year ago.

During Q4, Ubisoft said that it had strong sales of Just Dance for Wii, which has seen 3 million units sold-in. The publisher also said that November's Assassin's Creed II has reached nearly 9 million units sold-in during the fiscal year.

Ubisoft noted the strong reviews of Red Steel 2 for Wii, and said the game's performance was in line with recently-revised forecasts. In addition, sales of Avatar exceeded forecasts, "notably on Wii," Ubisoft said.

Guillemot said during a conference call that Ubisoft will continue to support Nintendo's platform, but with a focus on family-friendly titles.

"Wii is a more mass market machine now," he said, with sports and movie games selling well on the platform. "There still be lots of casual games like [Just] Dance … that will sell very well because of the number of machines installed."

The company did not offer specific full-year forecasts, but CEO Guillemot said Ubisoft expects "a return to profitable growth in 2010-11 with positive cash flow generation, driven by a games line-up that is more closely tailored to growth segments and based on strong franchises."

Ghost Recon: Future Soldier will be a "big booster" for the current fiscal year, according to CFO Alain Martinez. But the company said that it would push the game out from fiscal Q3 (the calendar holiday quarter) to fiscal Q4 (January-March, 2011).

For the first quarter ending June 30, 2010, the company expects sales of €145 million ($179.29 million), up 75 percent year-on-year. Driving factors include April's Tom Clancy's Splinter Cell Conviction, which Guillemot said has sold 1.8 million units to date. The company also expects the movie tie-in Prince of Persia: The Forgotten Sands to be a sales driver.

Guillemot added that Ubisoft expects to see positive results from investments in online games and services, as well as investments in Natal and Move development on Xbox 360 and PlayStation 3.

He also said, "we will continue to reorganize our studios and enhance our development teams' productivity. These reorganizational moves will enable us to release new iterations of our major franchises on a more regular basis, and guarantee high quality levels."

"This will allow us to secure a level of highly profitable recurring sales while continuing to tap the new growth opportunities in our industry."


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