French publisher $46.9 million in red despite strong GRAW sales, looks to Splinter Cell and Wii lineup for holiday hits.
Today, Ubisoft reported its earnings for the six months ending September 30, 2006. The period saw the company enjoy strong continuing sales of Ghost Recon Advanced Warfighter. US customers have scooped up more than 1.2 million copies of the third-person shooter since it went on sale March 9, nearly 900,000 of which were for the glowingly reviewed Xbox 360 version.
However, not even brisk sales of the latest Tom Clancy-inspired shooter could pull Ubisoft out of the red. During the six-month period, the first half of the Paris-based publisher's fiscal year, it posted an operating loss of 35.3 million euros ($46.9 million). While that was an improvement over the 43.7 million euro ($58.1 million) hit the company took during the same period in 2005, it came despite a 13 percent year-on-year spike in sales.
The increase in sales led Ubisoft to spin the numbers positively, with CEO Yves Guillemot saying, "The improvement in our results for the first half of the fiscal year reflects both a very good business performance and tight control of marketing expenditures." That said, the company did drop a cool 27 million euros ($35.9 million) to acquire the rights to the Driver and Far Cry licenses.
Given its holiday-heavy release slate, Ubisoft understandably tried to direct attention to the second half of its fiscal year, which ends on March 31, 2007. "The third quarter of [FY] 2006-07 is off to a good start," said Guillemot "with Red Steel and Rayman [Raving Rabbids] in the top five sales on the launch of the Wii, and Tom Clancy's Splinter Cell [Double Agent] and Tom Clancy's Rainbow Six [Vegas] returning to the front ranks."
The presumption that the aforementioned titles will do well led the publisher to raise its minimum sales growth target for the 2006-07 fiscal year from 8 to 10 percent.
I bought splinter cell 4 in October and can't even play with my video card. ATI 9800 pro works fine with splinter cell 1,2,3 and any other games I have. Ubisoft suggested that I buy a new video card, they are really alot of help. I will not be buying anymore games from Ubisoft. Les
THEBUCK27: The reason you'll see an end is because of the money required to produce the games is too high and the turn around time before profit is WAY to long. Not because of MS, SONY, or NIN....
I'd hate to see it happen but someday we may see the end of videogames which would really suck." I doubt games will ever come to an end. If Microsoft and Sony keep doing what they're doing, making games more expensive to make than they should be and constantly raising the bar for the price of hardware and software, they will fail in a couple gens most likely. But Nintendo knows what needs to be done to keep games popular for the long term. Lower price, lower standards for graphics, focus on the gameplay. Consoles that did that always ended up selling the highest and being the most profitable. The game industry will probably be very different in 10 - 20 years most likely, but it'll still be around and probably most of the same companies that are around now will continue making these games. At least that's what I think.
We will see what they do with the new games they bought and see if they make it any better.
Rayman Raving Rabbits is a great game. Can be frustating but great. I don't like the wii version of Splinter Cell from what I read from the reviews. Why leave out multiplayer? and why not spend more time polishing the controls?
Steel Samurai: Rainbow Six Vegas is waaaaaay better than that Lockdown crap and it's probably the best Rainbow Six game in the series IMO. You should try it.
Rainbow Six: Vegas has been a spectacular game so far, and Splinter Cell: Double Agent is pretty good as well.
"...looks to Splinter Cell and Wii lineup for holiday hits." Who are they joking, their Wii lineup are some of the worst of the worst, those will actually bring them loss instead of gain.
With the exception of pop, ubi have ruined every franchise they've touched. FCI: Evolution, GR:AW, RB6 Lockdown, SC: DA, Dark Messiah; they've all either been rubbish, watered down or plagued by sloppy coding, bugs and poor design choices. Assassins Creed is their last hope, I hope it's good I really do; it has the potential to be awesome, but ubi have a track record that makes even atari blush - and they put out driv3r and path of neo. (In fact pop was only spared thanks to the guiding hand of creator jordan mechner.)
KickinIt_ftw has it right, this is expected. It's going to take some time for them to get back in the black, but this is akin to pharmaco R&D costs needing drug shelf time to recoup the expenditure and get a profit. Also, 46 mil may sound like a lot, but it's nothing that will cause a downgrade in their stock or any waves in the financial community.
This isn't as bad as it sounds. Pumping out launch titles, on new hardware, for two-thirds of the console market is a pretty costly affair. After adding in the costs involved from buying up IP's like Farcry, a $46.9 mil loss for the period sounds about right. ...No need to panic. ;)
"They'll never make a BG&E2. The first one sold like 20 copies" Thats one for each console Sony managed to ship
I think for any company it is hard to make profit these days and eventually i can see all or most companies going under. It costs millions of dollars just to create these games.And these days there are so many people burning they're games and finding ways to pirate them.So these companies are loosing money and going under.It happened with Working Designs, Acclaim. And every time a new console comes out the games get more expensive to make which means the companies have to sell twice as many and half the companies aren't selling what they need too.I'd hate to see it happen but someday we may see the end of videogames which would really suck.
I shall be supporting them this Christmas by buying Rayman for the Wii. It's one fricked up game. Hopefully Ubisoft will do better this time around. I like them as a company and the games they develop.
reviews are written by biased people who SAY they have unbiased views, so i dont really believe many reviews. they seem to only look for graphics and innovation...
As soon as assassins creed hits stores Ubi will make alot of profit back so I dont think there is too much to worry about here for now.
I have respect for Ubi. I am gonna get Rayman RR soon, once I get a Wii of course. But having over 10 games at the Wii launch and launch window is asking too much for the consumer. Then again some of them are worth playing and some are not. Some of Ubisoft's games like Red Steel had mixed reviews: Gamespot gave it a 5.5 and Nintendo Power gave it an 8 or 9 in their reviews. Heck NP gave Splinter Cell for the DS an 8.5 while the rest of the reviewers gave them bad scores. One of Ubi's game I want for the Wii is FarCry. If it gets great reviews, then I might get that in my list (waiting for a review from Gamespot or other reviews out there.)
I would have some sympathy on them if I hadn't touched a couple Wii titles they put out. You can easily tell after playing them they were done to make a quick holiday buck. I did lose some respect for certain studios w/in Ubi. However Red Storm and their Montreal studio still gets much love from I.
I wouldn't be too worried about this report if you're an Ubi fan. This is only for half the year, and the slowest half at that. As this article says, most of their blockbuster games come out during the holidays. The other thing to keep in mind is that all pubs and devs are having to spend a lot of money gearing up for next-gen development, which will impact their profits for a year or two. I would be surprised if Ubi ends up losing money for the year.
maveric_xz I couldnt care less, thats what you get for rushing your BS games on the Wii. Far cry better be good- -----Do you even know a good game when you see one? EA doesnt make any so pick another one please
Ubisoft actually offer some quality games so it's only fair they do well, and they will do very well this winter...
I couldnt care less, thats what you get for rushing your BS games on the Wii. Far cry better be good-
and then, there is also Brothers in Arms Hell's Highway that should help them (together with Assassin's Creed) for PC sales. H'sH looks, from what I have seen so far, amazing :)
They'll be fine. Those kinds of losses aren't that bad in corporations. They'll come out in the black, I'm sure.
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