Vivendi Games earnings up 190 percent

World of Warcraft publisher reports massive spike in profits and a "great" economic performance.


World of Warcraft
Scarface: The World Is Yours

Recently, Blizzard announced that its massively multiplayer online role-playing game World of Warcraft had hit a total of 7.5 million subscribers. With the launch of the hotly anticipated expansion pack Burning Crusade on January 16, apparently all's well in Azeroth.

And life's pretty rosy for WOW publisher Vivendi Games, too. For the three months ending September 30, its profits were 24 million euros ($31 million) compared with 11 million euros ($14 million) for the same three months in 2005. In the first nine months of its current fiscal year, the company boasted an even bigger spike in earnings: 86 million euros ($110 million) compared to 30 million euros ($38 million)--a 186.7 percent increase.

Unsurprisingly, Vivendi Games attributed the profit spike largely due to what it describes as "the higher margin of the World of Warcraft business." It also cited other factors, including the start-up investments for the Sierra Online and Vivendi Games Mobile divisions and strong sales of Scarface: The World Is Yours in October.

VG's Paris-based parent company Vivendi also owns the Universal Music Group, Canal+ Group, SFR, and Maroc Telecom. The conglomerate adjusted its net income for the last nine months to 2.1 billion euros ($2.7 billion), a 16.3 percent rise on its previous forecast, and stated that its adjusted net income should reach 2.6 billion euros ($3.3 billion).

Deputy chief financial officer Sandrine Dufour commented that the Q4 period was not likely to be as profitable for Vivendi Games as the third quarter had been. "Q4 for games will see the release of some Sierra games, these are console games, and they don't carry the same kind of margin that you have in subscriptions of WOW," she said. "Also, we plan to launch a marketing campaign for WOW which will support the holiday season, and this will also impact on Q4 [financial] performance."

As to disappointing figures reported for WOW in China, Dufour said that the company had recently opened up a new server, and since then, "figures have returned to fast growth."

The company didn't comment on whether an announcement was going to be forthcoming on revenues for World of Warcraft, rumoured to have reached $1 billion for this year. Vivendi opted for general terms instead, describing the financial results of its games division as "very healthy and dynamic," and the overall economic performance as "great."

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