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Ubisoft: Wii To Rule Them All, Microsoft/Sony Battle Split In U.S/Europe

Ubisoft: Wii To Rule Them All, Microsoft/Sony Battle Split In U.S/Europe

April 24, 2008 | By Staff, Brandon Boyer

April 24, 2008 | By Staff, Brandon Boyer
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More: Console/PC

In an investor call following Ubisoft's strong full year results, execs predicted that - while the Wii will be the console leader in 2008, the PS3 will be stronger than the Xbox 360 in Europe, while Microsoft will lay claim over the U.S.

The Big Finishers

Talking to analysts during the call, Ubisoft CEO Yves Guillemot said that in America, "the power of the [installed base] will continue to keep a good market share" for Xbox 360, while in Europe, the PS3 "will grow faster than the 360."

However, he predicted, "the Wii will be the number one console in Europe and the U.S." in 2008. "We think that the Wii will continue to grow," Guillemot continued, adding that "what we [also] see is that the DS is doing extremely well... we have lots of new customers coming to the business."

Guillemot also said on the call that Ubisoft had some yet-unannounced party games coming exclusively to the Wii that he said would take advantage of "the new population coming to that machine."

The Casual Advantage

In general, he said that the company has realized 25 percent of its total in 'casual' play styles and genres, and that the profit margins on casual games is "one of the best," with the most profitable titles.

Leading on from this, an Ubisoft executive gave a breakdown of the company's average development costs per game - not often discussed in public - with a DS title costing between 500,000 to 1,000,000 euros ($785,000-$1.57m), PS3/Xbox 360/PC titles averaging 12 million to 18 million euros ($18.8m-$28.2m) to create for all 3 SKUs, and a Wii game expected to cost 5 million to 6 million euros ($7.8-$9m) to develop.

Future Growth

Overall, Guillemot also commented on the company's growth, saying that from 3,400 staff members in September 2007, the company has reached 3,600 by the end of this March, and should rise to 4,500 by the end of March 2009. Over 500 of those, he said, would be located in its studios in emerging markets such as Singapore, India and China.

That growth would also be reflected in new acquisitions, with Guillemot adding that "We will use our financial capacity to buy new studios, to buy IP... and increase the size of the company."

Specifically talking about 'big mergers,' he added, "If there are great opportunities, we'll take them... but we can't say more about that."

Microtransactions, In-Game Ads?

Finally, conversations turned to the perennial add-ons, microtransactions and in-game ads. Guillemot noted that added game levels, potentially microtransaction-funded, are important because they "...give our customers regular content so they can continue to play our games".

However, he cautioned that microtransaction revenue for Ubisoft overall was "...good but still low compared to what we can do when we generate a new [retail] product."

Guillemot was similarly bearish about in-game ads, noting that the sector was "growing, but not growing faster than the industry." He particularly commented: "We think it will explode at [some] time... [advertisers] need more proof that it will help people to sell more goods... it's taking more time that what we expected."

Haze Vs. GTA, Metal Gear

A near-final question quizzed specifically on the launch date for important Ubisoft title Haze, which debuts just a few weeks after Grand Theft Auto IV.

Guillemot explained: "We think that the timing for the release is good... it will be long enough after the release [of Grand Theft Auto IV] and before [the release of Metal Gear Solid 4]." However, he cautioned of the Free Radical-developed PS3 exclusive: "We don't expect huge numbers... [though] we think it will be a good game."

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