Ubisoft cuts full-year earnings forecast

Publisher shaves 12-month revenue to $1.25 billion; casual weakness leads to "refocus" on 360, PS3 development; new Driver, Raving Rabbids due by March 2011.

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Splinter Cell: Conviction has been a long time coming from Ubisoft, and the French publisher confirmed today that, despite announcements to the contrary, gamers have still more waiting to do. Once scheduled for February 23, Splinter Cell: Conviction is now on track for an April release, with WWII strategy title R.U.S.E. also bumped out of its current fiscal year ending March 31, 2010.

Avatar sales came in below expectations, as well.
Avatar sales came in below expectations, as well.

With the two high-profile games bumped from its current fiscal year, Ubisoft also took the step of lowering its third-quarter and full-year revenue forecast. The publisher now expects €495 million ($718 million) during the October-December quarter and €860 million ($1.25 billion) for the year, down from previous projections of €540 million ($783 million) and €1.04 billion ($1.51 billion), respectively.

Ubisoft also expects to post a €50 million ($72.5 million) loss for the fiscal year, a revision from its previous forecast of at least a €70 million ($102 million) operating income. The revision was due to a number of factors, including poor sales, underperforming catalog titles, and abandoned projects.

The two game delays aren't the only factors weighing on Ubisoft's financial performance. According to Ubisoft, its casual-games segment on the DS severely contracted in 2009, with revenues expected to fall €160 million ($232 million)--a 50 percent decline. The publisher did note that it has still seen success with its casual line on the Wii, particularly with its rhythm game Just Dance, released in November 2009.

Despite Assassin's Creed II's impressive 6-million-unit milestone, Ubisoft also saw weakness in its core game market. Namely, the publisher said that its heavily hyped game adaptation of James Cameron's Avatar, as well as unspecified non-casual Wii titles, turned in "lower than expected" performances. Exact figures for Avatar, the film inspiration for which has grossed over $1 billion worldwide, were not provided.

Given its weakness in the casual market in 2009, Ubisoft said that it plans to more heavily emphasize development for the Xbox 360 and PlayStation 3 during its coming fiscal year.

"With a view to further reducing our exposure to the DS, we intend to continue to refocus our development resources on our major franchises and on the Xbox 360 and PS3, the two consoles which are expected to see sales growth in games for gamers in 2010," CEO Yves Guillemot said in a statement. "The 2010-11 lineup--which is stronger in franchises for Xbox 360 and PS3--reflects our refocusing efforts and should enable us to both win market share and enhance our profitability."

Ubisoft also offered a cursory look at said 2010-11 lineup, one that revealed a few previously unannounced projects. Having stated its weakness in the racing market in November, Ubisoft said that it will at last make use of the Driver license it purchased from Atari in 2006. The publisher also expects to release Raving Rabbids 4, as well as a new Assassin's Creed episode that will introduce online multiplayer to the franchise.

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