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The Euro Vision: 'Nottingham Meets Ubisoft'

The Euro Vision: 'Nottingham Meets Ubisoft'

October 26, 2006 | By Jon Jordan

October 26, 2006 | By Jon Jordan
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This edition of Gamasutra's regular 'The Euro Vision' column sees Jon Jordan discussing the opening of the UK's new Gamecity game convention in Nottingham, as well as dissecting Ubisoft's recent financial figures, which are trés bon.

"Another week, another games festival. Wednesday saw the launch of Nottingham's Gamecity. Consisting of four days and 30 events, it seems to offer a great mixture of the though-provoking, celebratory, competitive, informative and the downright fun and silly.

Personally I can't wait for Free Radical's Gong of Terror, where the creators of GoldenEye and TimeSplitters will be fed the dreams of aspirant game designers in a sort of American Idol setup. (Gamasutra makes no assertions about David Doak's Simon Cowell-like ability to pull his pants up to his nipples, or perhaps more appropriately in Doak's case, his beard.)

Participants will get a maximum of two minutes to make their pitch or perhaps even less if the capricious gong master decides to swing his banger. But to the victor, the spoils of a two week internship at Free Radical. Surely that's worth a bit of public humiliation?

From Puttnam To Nuclear War

Back in the real world, Lord Puttnam (pictured) kicked off the festival in some style in the ballroom of Nottingham's impressive Council building. The director of The Killing Fields and Chariots of Fire is a longterm advocate of the potential of games to revolutionize education, as well as their ability to become an artform in their own right. Continuing a theme which now seems to be a touchstone both within and without the industry, he suggested gamemakers needed to extend themselves to create experiences to which the reaction of normal players would be to cry.

Completely unrelated, the Gamecity events kick off with an explanation of the design process of Introversion Software's global thermonuclear war simulator, Defcon. The title of the talk is 'Everybody Dies'. That will be a happy one then! Expect a full update on how the festival went next week.

Ubisoft Happily Mislays €24 Million

Good news for Ubisoft shareholders. The French publisher, which can rightly claim the title of Europe's biggest games company, thus its detailed coverage in this column, continues to impress when it comes to financial affairs.

Revenue for the three months ending 30 September was €102 ($128) million. Not particularly fantastic you might think as that's down 4 percent year-on-year, but considering it's €24 ($30) million more than Ubisoft's accountants predicted three months ago, I say the company was doing more than alright. Indeed, revenues for the first six months of Ubisoft's 2006-07 financial year were €172 ($216) million, up 14 percent year-on-year.

Reasons for such success were put down generally to the strong U.S. market - around half of Ubisoft's sales in are North America - as well as specifics such as selling 2.4 million copies of Xbox 360 title Ghost Recon Advanced Warfighter. Raising the spirits of the financial department even more were the €3 million ($4 million) sales generated by the release of a GRAW map pack on Xbox Live Marketplace - 150,000 downloads.

The Future Looks Bright?

But it's the future flow of products into the all-important holiday season that's buoying the company's shareprice.

Not only does it have seven launch titles for Wii, but GRAW 2 is in the schedule, as is the latest release in the Splinter Cell franchise; Double Agent, while the Tom Clancy steamroller continues with the Rainbow Six team heading off to do the business in Vegas. Another neat deal sees the company picking up various Star Trek games from Bethesda for European release, while stockingfillers such as Dogz, Catz, Horsez, and even Hamsterz Life also seem certain to charm their niche audience - small, pink-loving GBA and DS gamers in the case of the latter, rather than slightly overweight, Babylon 5 obsessives of the former.

Small wonder, then, that Ubisoft expects the three months ending December 31st to be its best ever, with revenue of €270 ($340 million) predicted. Total sales for the financial year will be well over €600 ($756) million, and that's even with anticipated next-gen titles such as Assassin's Creed and Brothers in Arms Hell's Highway pushed into 2007-08's accounts. And growth rate for that 12-month period is now predicted to be 25 percent.

Where's The Profit Figures, Guv?

The only fly in the ointment is the company's failure to reveal any figures related to profit (or loss). As proved by the notably stark case of the acquistionally aggressive Infogrames in the early 2000s, revenue figures aren't necessarily a good guide to a French's business' underlying profitability. Ubisoft has limited itself to saying operating income before employees' stock-based compensation is taken into account should be between 3 and 4 percent of revenues in 2006-07. This will rise to "at least" 8 percent in 2007-08.

On a more lateral note however, I wonder how much EA's 20 percent stake in Ubisoft, bought at the end of 2004, has subconsciously bought additional stability to the company. Its share price has more than doubled since the EA deal, and despite Ubisoft's protestations that it considers it a 'hostile bid', it must have focused executives' minds, as well as reassuring investors that this was a company which at worst would be bought out for a premium at some point in future.

In the meantime however, Ubisoft can use the strength of its shares to buy other companies as well as raise cheaper cash, should it feel the need. While EA remains a silent shareholder, it's a win-win for both sides. The crunch will come at some point though, and that's why it must remain a worry for the founding Guillemot brothers."

[Jon Jordan is a freelance games journalist and photographer, based in Manchester, UK. He doesn't own shares or even the games of any companies discussed. And no, he never expects to cry at a game either.]


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