First quarter sales outperformed the guidance of €60M communicated at the time of Ubisoft's fourth quarter 2005-2006 revenue release. 85% of first quarter sales were generated on high margin platforms (PC and new generation consoles): Tom Clancy's Ghost Recon Advanced WarFighter (X360/PC - 570,000 units) and Heroes of Might and Magic V (PC - 350,000 units).
The strong growth seen during the quarter was mainly related to strong sales in the United States, which saw a 34% increase in sell-through in an overall market which was up by 7%1 . North American sales represented 49% of total revenue, compared to 31% in the first quarter of 2005-2006. In the first six months of the calendar year, Ubisoft's US market share increased to 7%, compared to 5% in the first half-year of 2005.
Yves Guillemot, CEO of Ubisoft said "Ubisoft had a very good start of the year thanks to the success of Heroes of Might & Magic V on the PC and Tom Clancy's Ghost Recon Advanced Warfighter, the highest selling game on the Xbox360 in 2006. We are also pleased to note the spectacular launch of the Nintendo DS Lite and the solid performance of the Xbox 360 in the American market, a trend which bodes well for the coming upturn of the video games market."
For the second quarter of fiscal 2006-2007, with the launch of titles such as Pirates of the Carribean 2, Open Season and Enchanted Arms, the group anticipates sales of approximately €78M, leading to a mostly stable fiscal first half year in comparison with last year. The third quarter will see a strong activity, notably with the launch of Tom Clancy's Splinter Cell Double Agent (whose launch date is now scheduled for the end of October 2006), Rayman Raving Rabbids, Red Steel, Tom Clancy's Rainbow Six Vegas. Ubisoft confirms full year 2006-2007 guidance provided at the time of its full year 2005-2006 earnings release (5 to 10% sales growth and current operating income before stock based compensation to represent between 3 and 4% of total revenue).
Yves Guillemot continued: "Ubisoft continues its investments in order to be a dominant player on next-generation consoles. On July 13th we announced the upcoming acquisition of Driver and its technology, as well as the integration of its development team. Driver is a mythic brand which has already sold more than 14 million units around the world. This striking acquisition allows us to enter the driving game segment, one of the most important segments in the video game industry. We've already proved our ability to relaunch brands and make them into franchises that create strong value. Driver will stand with Tom Clancy's Splinter Cell, Prince of Persia, Rayman, Brothers in Arms, Tom Clancy's Ghost Recon, as one of the major Ubisoft franchises."