Ubisoft, the big French game company, reported third fiscal quarter results that met reduced expectations for its sales of video games in the busy holiday quarter.
Sales for the quarter were 495 million euros, down 2.7 percent from 508 million euros a year earlier. For the first nine months of the fiscal year, sales were down 22.5 percent. Ubisoft said it is refocusing its high-end game strategy by concentrating on more regular releases for its major franchises.
Ubisoft is also cutting back on new investments in games, allowing the company to rebalance its workforce among existing titles. That will help reduce volatility and increase visibility in its financial results. These measures resemble what Electronic Arts has focused on as well.
The company pre-announced lower expectations on Jan. 13.
Most of Ubisoft’s revenues come from traditional console games such as Assassin’s Creed II, which since its launch in November has sold an astounding 8 million copies. (Multiply by $60 retail price and you get $480 million in retail sales). But the company is also investing heavily online, with launches coming up for Might & Magic Heroes Kingdoms, Trackmania 2, and Imagine Town. The latter is a virtual world that will be plugged into the UbiWorld portal to target girl gamers. Ubisoft’s overall online hub will be Uplay, a portal for gamers that launched with Assassin’s Creed II in November. Ubisoft is also creating a platform of online services for PC gamers that will also help reduce PC game piracy. More details on that will be released in the coming months.
Ubisoft is also continuing with big investments in casual games, including Just Dance for the Wii, various projects associated with the launch of Project Natal gesture controls on the Xbox 360, and several games for Facebook and the PlayStation 3 motion controller (coming this fall). Meanwhile, Ubisoft has significantly curtailed its investment in Nintendo DS games.
In the fourth quarter that ends March 31, Ubisoft is releasing Assassin’s Creed II: Director’s Cut Edition for the PC, Red Steel 2 for the Wii, The Settlers 7: Paths to a Kingdom for the PC, and Silent Hunter 5: Battle of the Atlantic for the PC. Those are relatively small releases, and the company’s big game, Tom Clancy’s Splinter Cell Conviction, has been pushed to later in the year. Fourth fiscal revenues are expected to come in at 200 million euros, about 3 percent below last year. Ubisoft reaffirmed previous estimates for its fiscal year, and the company expects to return to profitability in fiscal 2011.
This year, Ubisoft’s major titles, in addition to Splinter Cell, include Driver, Prince of Persia: The Forgotten Sands, a Raving Rabbids title, and a new Tom Clancy game: Tom Clancy’s Ghost Recon: Future Soldier. That game is being developed in Paris and will launch in the holiday season this year. A multiplayer beta will start on the Xbox 360 with the release of the Splinter Cell game on April 13.