Ubisoft Q1 sales dive 51%

French publisher reports worse-than-expected April-June sales of $118 million, cuts full-year forecast.

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Ubisoft had a good idea that its first-quarter sales weren't going to win it any fans on Wall Street, projecting as part of its fiscal year-end results that the April-June quarter would see revenue slip 44 percent. However, even that dour prediction has turned out to be conservative. Reporting on its first-quarter performance today, Ubisoft said revenue for the three-month period came in at €83 million ($118 million), down 50.6 percent from the same period a year ago.

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The French publisher attributed the sales slip to three primary factors. First, Ubisoft said that its highly lucrative casual game business on the DS saw a significant drop-off in both catalog and new-game sales in Europe and the United States. Ubisoft's catalog business on the Xbox 360 and PlayStation 3 also saw weakness compared to last year, when the publisher was still seeing strong Assassin's Creed sales. Overall market conditions were the final reason Ubisoft blamed.

Ubisoft does not expect conditions to improve during its in-progress second quarter. In light of the grim first-quarter sales, Ubisoft said that July-September revenue is now expected to be €80 million ($114 million), a 54 percent decline and well below previous estimates of €130 million ($185 million). During the quarter, Ubisoft expects to launch Teenage Mutant Ninja Turtles, Cloudy with a Chance of Meatballs, Academy of Champions, and a range of casual titles for Nintendo's platforms.

Investors won't be the only ones groaning over Ubisoft's report today. The publisher also announced that it would be bumping four of its highly anticipated titles from its current fiscal year: Splinter Cell Conviction, Red Steel 2, Ghost Recon, and I Am Alive.

With the first-half sales weakness and game delays, Ubisoft also made the unsurprising move of cutting its full-year sales projections. Having previously offered full-year revenue guidance of €1.1 billion ($1.56 billion), Ubisoft now expects to bring in €1.04 billion ($1.48 billion), with operating income accounting for 7 percent of sales.

The publisher noted that fiscal first-half weakness stood as the largest contributor to this revision, as it had previously accounted for the delays in previous projections. As such, the publisher still expects to see 23 percent sales growth during the back half of the year, when it will launch Assassin's Creed 2 and Avatar, among other titles.

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