Ubisoft Loses $73 Million in First Half

As is typical for French companies, Ubisoft today announced its income statement following the recent news that the company's net sales dropped 52% for the first half. The publisher's net loss for the first six months of its fiscal year came to 52 million euros ($72.8 million) compared to net income of $33.6 million for the same period a year earlier.

The company noted that while gross profit on games launched during the first six months of 2009-10 was higher than in the equivalent prior year period, Ubisoft's back catalog titles actually yielded a negative gross margin. The company had fewer new game launches in the first half, but with the recently launched Assassin's Creed II already selling very well, and the upcoming Avatar game expected to perform well, Ubisoft isn't worried about its performance.

Yves Guillemot, chief executive officer of Ubisoft, commented, "First week sales of Assassin’s Creed II are up 32 percent with positive initial indications for the second week, combined with an overwhelmingly warm reception from gamers, validates our strategy of developing bigger franchises. Based on this initial data, Assassin’s Creed II looks well positioned to outstrip targets while our Wii games have been off to a more contrasted start in a less predictable market. Finally, sales of James Cameron’s Avatar: The Game should benefit from the launch of the movie which is expected to be the biggest blockbuster film of this holiday season."

Guillemot's comments about Ubisoft's Wii games further reinforce the notion that Wii's bubble may be deflating.

Looking ahead to the third quarter, Ubisoft said it's expecting sales of around 540 million euros ($756 million), and for the full year the publisher anticipates sales of approximately 1.04 billion euros ($1.456 billion)  with current operating income before stock-based compensation representing at least 7 percent of sales.