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'GRAW 2' Revealed, 'Assassin's Creed' and 'BiA 3' Delayed

by Rainier on Oct. 24, 2006 @ 10:57 a.m. PDT

Ubisoft released its sales numbers for the 1st semester 2006-07, and while the 1st quarter was up 13% (from €153M to €172M), the 2nd quarter was down 7% (€102M versus €110M). Overall results exceeded expectations, but more importantly, Ubisoft revealed Ghost Recon Advanced Warfighter 2 is in development and scheduled for Q4 2006-07 (Jan-Mar 2007), while Assassin's Creed and Brothers In Arms Hell's Highway have been delayed until fiscal year 2007-08 (anywhere from Apr 2007-Mar 2008). Seven additional Wii titles are in development, bringing the total of games for Nintendo's next-gen console to 14 by the end of March 2007.

Sales for the first semester 2006-07 were €172M, up 13% (+14% at constant exchange rate) compared to €153M in the first semester 2005-06.

Sales for the second quarter 2006-07 amounted to €102M, down 7% (-4% at constant exchange rate) compared to €110M in the second quarter 2005-06. Second quarter sales outperformed by €24M the guidance of €78M communicated at the time of Ubisoft's first quarter 2006-07 report, mainly because of:

  • €11M in sales of titles not included in the initial forecasts, with in particular Kingdom Hearts® II and Import Tuner Challenge™.
  • An additional €10M in sales compared to initial forecasts on the titles launched during the quarter (Pirates of the Caribbean 2, Open Season™, Enchanted Arms™) and on the back catalogue (Tom Clancy's Ghost Recon Advanced Warfighter™, Over G Fighter™ and Heroes of Might and Magic® V).
  • Online activity revenues that reached €3M, exceeding forecasts by €1.7M

"Ubisoft achieved a strong first semester, exceeding our first expectations by 25%," said Yves Guillemot, CEO of Ubisoft. "This performance results from:

  • The quality and diversity of our catalogue
  • The strength of our distribution network which allows for efficient promotion of our games and brings us an increasing number of publishing and distribution deals.
  • A leading position in the online console gaming market. With €3M in sales on Xbox Live® Marketplace, thanks particularly to Tom Clancy's Ghost Recon Advanced Warfighter which sold 150,000 downloads of an additional map pack, Ubisoft generated its first significant revenue in online gaming.
  • The strength of the American market, which is up 18% over the 4 last months."

The third quarter of 2006-07 will bring an exceptional line-up:

  • Leading brands: Rayman Raving Rabbids™, Tom Clancy's Rainbow Six® Vegas and Tom Clancy's Splinter Cell Double Agent™.
  • Newly created brands: Red Steel™ and Dark Messiah Might and Magic™.
  • Licensed games: Open Season™ and Star Wars Lethal Alliance™.
  • 7 games for the Wii™ launch.

Consequently, Ubisoft anticipates revenue of approximately €270M, exceeding the group record of €250M in the third quarter of 2005-06.

Outlook for fiscal years 2006-07 and 2007-08: Taking into account its particularly strong line-up for the second semester and for the following year, Ubisoft has revised upward its 2006-2007 and 2007-2008 objectives communicated previously at the time of its 2005-06 earnings announcement:

  • The revenue growth for 2006-07 is now expected to be between 8% and 12% compared to the previous forecast of 5% and 10%. The current operating income before stock-based compensation should be between 3% and 4% of total revenue as previously announced.
  • For the fiscal year 2007-08, the expected revenue growth now stands at approximately 25% compared to the previous forecast of over 17%. Current operating income before stock-based compensation should represent at least 8% of the total revenue; the previous forecast mentioned a very strong improvement of current operating income before stock-based compensation.

Fiscal Fourth quarter line-up update:

  • Ubisoft today announces the launch in the fiscal fourth quarter of Tom Clancy's Ghost Recon Advanced Warfighter™ 2, which will capitalize on the first episode's success (more than 2.4 millions copies sold).
  • This launch will take the place of Assassin's Creed™ and Brothers In Arms Hell's Highway™, which will now strengthen fiscal year 2007-08.
  • 7 additional games will be available on the Wii™, including one non announced new brand, bringing the total number of games available to 14 by the end of March 2007.

"Ubisoft managed to take full advantage of Microsoft's Xbox 360 and should now benefit from the much awaited PlayStation 3 and Wii launches, with in particular 7 titles available for the Wii", says Yves Guillemot. "We have the second largest creation workforce in the industry, which we have built up over the past 10 years, and a powerful and wide-reaching distribution network. Ubisoft has ideally positioned itself to outperform the very strong growth of the market in the coming years."

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