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New releases led growth in Ubisoft's third quarter

New releases led growth in Ubisoft's third quarter

February 12, 2018 | By Alissa McAloon

Ubisoft has posted its financial results for the third quarter of its 2017-18 fiscal year noting that new releases drove much of its growth for the three month period.

The company reported an 84 percent increase in digital revenue year-over-year, coming in at €330 million (~$405.3 million) for the quarter ending December 31. All in all, digital revenue represented 45 percent of total revenue for the company this quarter versus only 34 percent during the same period last year.

Player recurring investment, which tracks the sale of digital items, DLC, season passes, and subscriptions, also saw a significant year-over-year boost, increasing by 96 percent to €145 million (~$178.1 million) for the quarter. While player recurring investment wasn’t the primary breadwinner for Ubisoft’s digital sales like it was last quarter, the category still represented 20 percent of total revenue.

Overall sales were up from last year’s numbers by 36.8 percent coming in at €725.0 million (~$890.4 million) and surpassing Ubisoft’s projected targets for the quarter. Meanwhile, back-catalog sales came in at €231 million (~$283.7 million) this quarter, a 13 percent increase year-over-year. Those sales notably made up a smaller percentage of overall revenue this year, falling from last year’s 39 percent to 32 percent in Q3 2017-18.

While the company’s back catalog is typically a driving force behind its quarterly sales, Ubisoft leadership noted in a conference call that the growth it saw this quarter was driven largely by new releases and not back catalog titles, though both digital and back catalog titles saw record sales this quarter.

Ubisoft CEO Yves Guillemot notes that this quarter’s numbers represent the positive impact made by a number of key areas in the company’s strategy, mainly its efforts in live games and it’s ‘quality over quantity’ approach to game development.

Guillemot notes three of the company’s recent releases have benefited from giving developers additional time to polish projects rather than rushing to release. Because of both this and its live operations strategies, the studio notes that Assassin’s Creed Origins is on track to sell twice as many copies as the previous title in the series and has already seen better season pass attach rates. 

"These successes demonstrate that our differentiating strategy of combining long-term investment in our talented teams and our multi-studios collaboration model is paying off,” said Guillemot. “This strategy enables us to deliver high-quality blockbusters while keeping our communities engaged through regular major updates.” 

For all 9 months of the current fiscal year, Ubisoft’s sales are up 46.8 percent from 2016-17’s  €811.3 million (~$996.4 million) to 2017-18’s €1.2 billion (~$1.5 billion). Going forward, the company expects its full-year sales to fall near €1.6 billion (~$1.9 billion) and profit at €270 million (~$331.6 million). Since French accounting law only requires companies to disclose its profits at the end of the fiscal year, that projection is the only glimpse at Ubisoft’s 2017-18 operating income offered in the quarterly report. 

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