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Ubisoft Q1 sales dive 51%

By Tom Magrino, GameSpotPosted Jul 27, 2009 9:57 am PT

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

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 in April that the March-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.

Relax Sam, they've done away with debtors prison in most parts of the world...

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.

79 Comments

  • darklord_dragon

    Posted Aug 14, 2009 8:51 pm PT

    i agree with BarkLikeADog it is really stuipid to waste important reasources on makeing crappy games that you are tring to sucker 5 yearolds into buying

  • BarkLikeADog

    Posted Aug 1, 2009 7:15 am PT

    "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."

    Jesus ubisoft. And you wonder why your sales are down? Quit funding crappy games. None of those will sell and quit making games for the DS. Its a total fail system unless you're making another nintendogs.

  • Alter_Echo

    Posted Jul 30, 2009 2:13 pm PT

    I think the lineup of games mentioned in the article is more to blame than the rough economy that ubisoft cited. Stop blaming others for your apparent reluctance to release quality software.

  • geedotherodian

    Posted Jul 29, 2009 10:08 pm PT

    I love Ubisoft but they need to quit it with the shovelware they are spitting out for the DS and Wii, they are just enabling Nintendo

  • issizots

    Posted Jul 28, 2009 11:31 pm PT

    THANK GOD i'd have died if assassins creed 2 woulda been delayed. out of the 6 games i've already bought that's coming out and i've prepaid for 4 have been delayed due to "so called" losses in revenue(inwhich every company should have EXPECTED(losses) due to the global economy) there's no excuse to delay games like this. Sounds like to me that companies need better insight and oversight for their yearly calculations according to what's going on "real time" in the world instead of always projecting positive numbers why don't they also project negative numbers and already prepare for the loss instead of LET THE WHOLE FANBASE feel the pain aswell... because it does hurt...because somehow, I just feel assassins creed 2 just STILLLLLLLLLLLLLLL might be delayed.... and my damn bday is nov 15th...lol. oh ima be so heartbroken if it's delayed :/ can't wait for trophies though for assassins creed 2! also wish they'd patch assassins creed 1 trophies

  • actsai

    Posted Jul 28, 2009 3:20 pm PT

    Well if Assassin's Creed 1 still worth mentioning even now then Ubisoft did have a gapping hole in its lineup schedule.

    Far Cry 2 was not too shabby IMHO saving the SecuROM part, except both games are very repetitive after once over, and why AC1 has no online component to it?

  • imborg007

    Posted Jul 28, 2009 10:00 am PT

    Daaa! Where's the new Rainbow 6 with four player co-op? Lost along with their revenue stream. I'm a huge Ubi fanboy, but I haven't seen anything remotely interesting from them this year. With Splinter Cell postponed, I guess I won't be sending any "bail-out" money their way until 2010.

  • Spexter

    Posted Jul 28, 2009 9:40 am PT

    their sales dropped because they haven't released any good games recently...once they give us AC2,SCC and the rest their sales will go through the roof...unless they do something terrible and mess up those games(which i hope they won't)

  • thesaracen123

    Posted Jul 28, 2009 9:20 am PT

    With Teenage Mutant Ninja Turtles, Cloudy with a Chance of Meatballs, and Avatar its no wonder why ubisoft is declining 54%

    SCC and I Am Alive will be amazing though

  • driver_unknown

    Posted Jul 28, 2009 8:45 am PT

    Well if they didnt hold onto games for as long as possible then they may see some profits.

  • jhobgoo

    Posted Jul 28, 2009 8:01 am PT

    This seems more dramatic and negative than it really is, IMO. With the economy the way it is for most of the world, a quarter or two of losses in a row makes the front page with a subtitle "Next Stop: Bankruptcy?" when it wasn't all that uncommon before the economic woes we've seen in the past few years.

    However, when you look at it from the industry perspective, you realize that major developers like Ubisoft don't exist because of casual gaming. Ubisoft exists because of the great quality of work they put into their AAA titles, and they are almost always slated for a strategic holiday season release. Ubisoft is in an off season, and I would guess (without having done the research) that they have produced less casual gaming Q1 this year than Q1 last year to save money, which resulted in lower profits. The numbers that will really matter is what kind of profits came in from Assassin's Creed 2, Avatar, Conviction, etc. When your big games don't sell well, that's when a development company should start thinking about making some tough decisions.

  • bagehi

    Posted Jul 28, 2009 6:38 am PT

    Apparently, they expected online content to be higher, but are expecting their releases to meet previous expectations. They're delaying games. Hopefully they are not rushing the others or they'll end up with more disappointing quarterly reports. That and millions of disappointed AC fans. My fingers are crossed. Please don't rush AC2 out before it is ready.

  • GiRiSh1982

    Posted Jul 28, 2009 3:18 am PT

    Assassins Creed 2 is no doubt gonna be huge for Ubisoft. The 1st game sold over 8 million copies, so let's say about 10 million for the 2nd game?

    The game's comin' out in November, so probably about 3-4 million sale before the end of the year.

  • pakhair

    Posted Jul 28, 2009 2:58 am PT

    A lot of delays Ubisoft, I think we only have AC left now, Avatar might b good but we haven't seen it until now......

  • Humorguy_basic

    Posted Jul 28, 2009 2:57 am PT

    Does nobody see what's going on here? This rush to $10-20 casual gaming is never going to bring in the money compared with $60 AAA titles! Because Ubisoft has moved away from hardcore gaming on the 360, PS3 and PC (hence lower income for those machines) and moved to casual gaming, it needs to sell 3-6 times more units to bring in the same money. It patently isn't doing that.

    On this site we have had multiple articles from so-called experts saying it doesn't matter, for example, that retail and AAA PC title sales are falling, as the income will be taken up by flash games and casual games. But these games, in many cases, are sub $10 games, which means you need to sell an awful lot more of them (maybe 10 times more!) An article recently said that casual game downloading will be worth a billion dollars by next year, and that may be correct, but I think it will replace three billion in lost sales of hardcore games that are coming out in much fewer numbers, and consequently selling less units.

  • sun_rider95

    Posted Jul 28, 2009 1:40 am PT

    come on ubi you need to beat ea

  • Ruhdezee

    Posted Jul 27, 2009 11:43 pm PT

    I think that Ubisoft is just experiencing a drought before the flood. Now that their AAA titles such as Assasin's Creed II, Splinter Cell : Conviction, Avatar, and Red Steel 2 are all going to be released in the same quarter Ubisoft will see a huge profit in a short space of time.

  • Nintendo_Man

    Posted Jul 27, 2009 11:40 pm PT

    Yet they will release more shovelware, people are obviously sick of them.

  • badtaker

    Posted Jul 27, 2009 11:21 pm PT

    Ubisoft are medicore developers.They only make good trailers not the game.
    I am worried about Splinter Cell Conviction

  • SkidRow18

    Posted Jul 27, 2009 11:15 pm PT

    why worry, Assassin's Creed 2, Splinter Cell Conviction will be a huge hit

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