How's Ubisoft Doing? Key Takeaways From Its Latest Earnings Report
A new Assassin's Creed and Far Cry 5 will be out in less than a year.
Amid continued concerns of a possible hostile takeover by Vivendi, Ubisoft has reported its earnings for its most recent fiscal year, where it enjoyed record-high digital revenue.
Most significant was the news concerning the current fiscal year, which runs through March 2018--in that period, Ubisoft confirmed it will release a new Assassin's Creed game, Far Cry 5, and The Crew 2, as well South Park: The Fractured But Whole. The following year, which runs April 2018-March 2019, will see the release of four AAA games. Three of these are existing franchises, while the fourth is a new IP.
As for the outcome of its financials, digital sales were on the rise for Ubisoft 2016-17 fiscal year, which ended on March 31, 2017. Its digital segment made up 50% of total sales during the year, and CEO Yves Guillemot boasted about both the success of Ubisoft's Tom Clancy games and its "Live" titles.
"With 44 million unique registered players, the size of the Tom Clancy community has increased by almost 150% in less than 18 months," Guillemot said. "This impressive performance for a brand created almost 20 years ago clearly illustrates the strong popularity of Ghost Recon: Wildlands, Rainbow Six Siege, and The Division. Our Live titles continue to beat records for player engagement and have seen a sharp rise in player recurring investment. Our results for 2016-17 demonstrate the success of our new model, with record high operating income and outperforming the target announced a year ago, and operating margin up for the third consecutive year."
Guillemot also made note of how its Live games--those like Siege, The Division, or The Crew that are regularly updated and maintained over a long period of time--help to make its business less reliant on new releases. Siege saw a record high for players during the January-March 2017 quarter. Ubisoft also suggested the new Assassin's Creed may have some kind of live component.
While was not mentioned in its earnings, Guillemot said during an earnings call that Steep had already proven to be profitable.
Regarding Nintendo Switch, Ubisoft CFO Alain Martinez said the company believes it has the "potential to reach a wide audience." Ubisoft has been the top third-party publisher on Nintendo consoles over the last decade, and he said it intends to maintain its hold on that position. It indicated it has new games coming to the platform but didn't share any specifics. A Mario-Rabbids crossover game is rumored to be in development.
Ubisoft pointed out that it believes there is a "major possibility for the future" to increase recurring spending in its games, though Martinez said the company wants to be "fair" about how it pursues the opportunity.
Total annual sales were €1,459.9 million, an increase of 4.7% compared with the prior year; digital revenue accounted for €729.3 million of that.
Since the beginning of calendar 2017, Ubisoft says it's the number one publisher worldwide in terms of physical and digital game sales on console and PC. Additionally, it claims Ghost Recon: Wildlands is the year's top-seller so far, while For Honor is No. 2.
This story has been updated with details from the conference call.
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