Ubisoft Slashes Outlook, Delays Splinter Cell Conviction and R.U.S.E.

Only a few days after Electronic Arts cut its guidance, French publisher Ubisoft is the next to revise its full-year targets downwards. Ubisoft said its sales targets for third quarter and full fiscal year 2009-10 are now €495 million and around €860 million, respectively. The company previously was expecting Q3 sales of €540 million and full-year sales of €1.04 billion. Furthermore, Ubisoft now expects to end the fiscal year with an operating loss of around €50 million, instead of the previously announced target of operating income of at least €70 million.

So what went wrong? Part of it reflect delays to Splinter Cell Conviction and R.U.S.E. Both games had been slated for Ubisoft's fiscal Q4 (Q1 of calendar 2010), but they are both now scheduled for the 2011 fiscal year. Splinter Cell in particular will ship in April, Ubisoft said.

The bigger problem for Ubisoft, however, is that the casual market appears to be dragging down the bottom line. The DS market was especially troublesome for the publisher. "After several years of very strong growth, the significant correction of the DS market in 2009 particularly affected Ubisoft. As a result, despite relatively robust sales for Wii casual games, and particularly the success of Just Dance, sales in the casual segment are expected to be down for the full year by around €160 million, representing a drop of around 50 percent," Ubisoft explained.

Ubisoft also pointed to a "market concentration on AAA titles," which Assassin's Creed II has benefited from with sales of more than 6 million units, but the trend hurt James Cameron’s Avatar: The Game and Ubisoft saw "several non-casual Wii titles reporting lower-than-expected sales."