Ubisoft delays marquee early 2011 titles to April or later as part of mixed first-half sales; sales rise 57% to $354 million, losses mount to $122 million; reorg sees projects canceled.
Ubisoft certainly delivered on first-half sales, but profitability is another matter. Reporting on its earnings for the six-month period ended September 30 today, the Parisian publisher saw revenues rise 57 percent to €260 million ($354 million). However, one look at the publisher’s bottom line, and it becomes apparent that a touch of discord is brewing within the company. Namely, Ubisoft reported a net loss of €89.8 million ($122 million), off 34.5 percent from the same period a year ago.
Two factors contributed heavily to Ubisoft’s profit shortfall. The first is the disappointing start for a handful of its titles released during the period. H.A.W.X. 2 and R.U.S.E., both of which were released on September 7, “performed below expectations,” though Ubisoft did not indicate sales totals for either game. And though Shaun White Skateboarding’s release fell outside the reporting period, Ubisoft CEO Yves Guillemot indicated as part of a post-earnings conference call that the game is “off to a slow start.”
The second contributing factor to Ubisoft’s losses during the quarter was related to a substantial reorganization, one that involved the cancellation of an undisclosed number of projects. The reorganization and project cancellations resulted in a €45.3 million ($61.6 million) one-time charge for the company.
“Ubisoft is taking measures to adapt its structure to the major changes in the industry by reorganizing the roles and operations of its studios, which has resulted in the termination of certain projects,” the publisher said as part of its earnings report.
Ubisoft did not indicate whether it had reduced headcount as part of its reorganization, not whether any of the canceled projects had been previously announced. The publisher had not returned a request for comment as of press time.
To finish off the disappointing news from Ubisoft, the publisher also had two game delays to announce. Both once slated to arrive during the first three-months of 2011, Tom Clancy’s Ghost Recon Future Soldier and Driver: San Francisco have been pushed out of Ubisoft’s in-progress fiscal year. The publisher now expects to release both games during its next fiscal year, which runs April 1, 2011 to March 31, 2012.
Despite the negative news, Ubisoft maintained that it will hit its previously announced guidance for the full-year. Helping it do so is the hit-in-waiting Assassin’s Creed: Brotherhood, as well as strong performances from its Kinect lineup, Just Dance 2’s 75 percent year-over-year growth, and digital sales.
Additionally, Assassin’s Creed: Brotherhood preorders are up 25 percent from those of Assassin’s Creed II, a game which went on to ship more than 9 million units. According to Guillemot, focus group scores for Brotherhood are the highest ever for an Ubisoft game.
As far as Ubisoft’s Kinect lineup goes, the publisher said that Your Shape: Fitness Evolved has become the best-selling third-party title for the Xbox 360 add-on in the US. Ubisoft also noted that Fighters Uncaged, which received dismal review scores, as well as Motion Sports are both off to promising starts. All said, the publisher expects to release six Kinect titles before the end of March 2011.
On the digital front, the publisher has seen a doubling in sales during the period, with its top performer being the comic book-cum-silver screen tie-in Scott Pilgrim vs. The World, which was released through Xbox Live and the PlayStation Network in August. The publisher also called out the strength of unspecified downloadable content as well as the digital sales of certain PC games.
Ubisoft expects to double digital sales for each of the next two years. One way in which it plans to do so is through the digital rerelease of some of its catalog hits. According to Guillemot, Ubisoft will release the first three Splinter Cell installments as well as the Prince of Persia: Sands of Time trilogy through downloadable channels. The Sands of Time trilogy is expected to arrive for the PSN as well as at retail before the end of the year.
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