Today, Ubisoft released their financial report for the fiscal year ended March 31, 2010. Full-year revenue totaled $1.2 billion, down 17.7% from $1.5 billion for the same period last year. The company reported a net loss of $61.6 million, a steep drop from last year’s $97 million profit.
"The global economic crisis had a pronounced impact on the video game industry in 2009, which contracted by nearly 10 percent year-over-year,” stated Ubisoft CEO Yves Guillemot. “Ubisoft’s sales were hit particularly hard, falling 18 percent over the full year despite stabilization in the second half of the year when figures came in on par with the corresponding period of 2008-09. This overall contraction in sales, combined with additional write-downs recorded for games already launched in addition to upcoming releases, led to a [$84.6 million] operating loss."
Ubisoft noted that they had a low number of launches on higher margin consoles (Xbox 360, PlayStation 3, and PC). Of the titles they did release, Assassin’s Creed II remained the strong seller with nearly 9 million units sold during this fiscal year. Just Dance, the family-fun music title for the Nintendo Wii, sold a surprising 3 million units over the fiscal year. Sales of the Wii-only Red Steel 2 remained in line with forecast, while Avatar outperformed, especially on the Wii. The recently released Splinter Cell: Conviction has already sold 1.8 million units.
The company also said that lower back-catalog sales had depressed their overall gross profit. Back-catalog sales were down to $155 million (with a negative gross margin of 10%) versus $310 million during the same period last year (with a gross margin of 50%). Ubisoft believes the excess inventories, which were mostly DS titles, were caused by a competitive marketplace and the growing problem of piracy.
For the first four months of calendar 2010, Ubisoft rose to the third largest independent publisher in the United States, with 6.8% market share. They also took the number two spot in Europe, Germany and the United Kingdom, with 9.9%, 9.4% and 12.1% market shares respectively.
Looking forward, Ubisoft believes they can recover from this year’s losses and expand further into the market. The company expects first quarter 2010-11 sales to come in 75% higher than the same quarter last year, with a total of $204 million.
"We forecast a return to profitable growth in fiscal year 2010-11 with positive cash flow generation, driven by a games line-up that is more closely tailored to growth segments and based on strong franchises. We also expect to see the first concrete results from our investments in online games and services. Lastly, the upcoming launches of new consoles, including Project Natal and Sony Move, should enable us to capitalize on the technology investments that we have undertaken in recent years and re-energize the casual games segment,” said Guillemot. “At the same time, we will continue to reorganize our studios and enhance our development teams' productivity. These reorganizational moves will enable us to release new iterations of our major franchises on a more regular basis and guarantee high quality levels. This will allow us to secure a level of highly profitable recurring sales while continuing to tap the new growth opportunities in our industry."
For this year, the company is committed to releasing Prince of Prince: The Forgotten Sands on every system under the sun, Pure Futbol for Xbox 360 and PlayStation 3, and Assassin’s Creed Brotherhood for Xbox 360 and PlayStation 3.
