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Ubisoft Q2 2008 Financial Results Show Sales Surge, Reveals Game Delays

by Rainier on Oct. 23, 2008 @ 12:11 p.m. PDT

Ubisoft released its sales for the fiscal half-year which ended Sept. 30, 2008, revealing sales are up 37% compared to last year, mainly driven by Brothers in Arms Hell's Highway, SoulCalibur IV (Europe) and its casual games lineup. Ubisoft expects further sales increase with its holiday lineup including Far Cry 2, Snowboarding, Prince of Persia, EndWar, Rayman and several more. Unfortunately, there is also some bad news, as Related Designs' strategy game, Anno 1404, and an unannounced title, were pushed until next fiscal year (anywhere from Apr. 1, 2009 to Mar. 31, 2010).

Sales for the first half of 2008-09 came to €344 million, up 31.5%, or 38.3% at constant exchange rates, compared with the €261 million recorded for the same period of 2007-08.

Second-quarter sales totaled €175 million, representing an increase of 37.3% (43.6% at constant exchange rates) on the €127 million posted for the second quarter of 2007-08. This performance – which exceeded the guidance of approximately €160 million issued when Ubisoft released its sales figures for first-quarter 2008-09 – was primarily attributable to:

  • The successful launches of Brothers in Arms Hell's Highway and SoulCalibur IV (Europe) for the Xbox360 and PS3.
  • Solid sales turned in by casual games including new titles such as Imagine Teacher, My Secret World by Imagine and PlayZone Sports Party.

Yves Guillemot, Chief Executive Officer, stated: "Ubisoft delivered a robust performance in the second fiscal quarter against an uncertain environment. We are carefully and regularly monitoring changes in the economic context in order to factor them into our market forecasts and financial targets. Going forward, we are confident that the video game industry will be able to continue its dynamic growth in 2008 and 2009, buoyed by the increase in the installed base for consoles coupled with the steady influx of new consumers. At the same time, we believe that thanks to the diversity and quality of Ubisoft’s games line-up – which caters to both hard-core and casual gamers – we are ideally positioned to continue to win market share in the coming years. Holiday 2008 will be another demonstration of this, as we are introducing a gaming experience for everyone with the following titles:

  • Far Cry 2 and Tom Clancy's End War for hard-core gamers.
  • Rayman Raving Rabbids 3 and the PlayZone range, designed to be played by the whole family on the Wii.
  • Prince of Persia for adventure-seeking gamers, and Shaun White for sport and snowboarding fans.
  • The Petz and Imagine ranges, designed for girls, and Jake Power for boys as well as the ENER-G sport range dedicated to the US market.
  • The Planet Rescue range, which will give children the opportunity to take an interest in protecting the environment, as well as the MyCoach range which will enable adults to both learn and look after their well-being while playing."

Based on currently available information, Ubisoft expects current operating income before stock options to represent a marked increase compared with the 3.4% of sales recorded for the first half of 2007-08. This rise mainly reflects the leverage effect on structure costs related to the strong increase in sales, as well as the favorable impact of the “Games for Everyone” range which requires a low level of R&D expenditure.

The third quarter of 2008-09 will be the most important and diversified quarter in Ubisoft's history, with the following main releases:

  • Far Cry 2 for the Xbox360, PC and PS3
  • Prince of Persia for Xbox360, PC, PS3 and Nintendo DS
  • Shaun White for the Wii , Xbox360, PC, PS3, Nintendo DS , PSP and PS2
  • Rayman Raving Rabbids 3 for the Wii and NDS
  • Tom Clancy's EndWar for the Xbox360 , PC and PS3, NDS and PSP ,
  • New casual games for the Nintendo DS and Wii for the Petz, Imagine, MyCoach, ENER-G (US), Jake Power, Planet Rescue, and PlayZone ranges.

Consequently, the Group expects third-quarter 2008-09 sales to come in at around €500 million, up 11% on the same period of 2007-08.

In view of the good first-half trends and the positive outlook for the third quarter, Ubisoft has decided that Anno as well as the as-yet unannounced franchise which were previously scheduled to be released in 2008-09 will now bolster the line-up for 2009-10.

Based on solid first-half sales performance combined with a more favorable dollar impact and the positive third-quarter outlook, Ubisoft is raising its targets for full-year 2008-09. The full-year sales guidance is now around €1,050 million compared with the previous figure of around €1,020 million, and the guidance for current operating income before stock options has been revised upward to at least 13% of sales versus the previous target of at least 12%.

Market share: In the first nine calendar months of 2008, Ubisoft was the number 4 independent publisher in the United States with 5.1% market share (compared with number 4 and 5.6% one year earlier); number 3 in Europe with 8.1% market share (compared with number 3 and 7.9%); number 2 in France with 7.5% market share (compared with number 3 and 7.5%); number 4 in the United Kingdom with 8.4% market share (compared with number 3 and 9.0%); and number 3 in Germany with 7.6% market share (compared with number 3 and 6.9%).

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