SOFTWARE INDUSTRY NEWS

Ubisoft updates about Q3 performance and Splinter Cell Conviction, RUSE delays
15 January 2010 , Written by Dhruv Tanwar
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Ubisoft updated its 2009-10 targets, revising sales targets for third-quarter and full-year 2009-10 downwards to €495 million and around €860 million respectively, from previously announced figures of €540 million and €1,040 million.

The company attributed the downward revision to the following factors:
  • Market corrections in 2009 for DS titles, which have impacted Ubisoft significantly. It said that sales in the casual segment are expected to be down for the full year by around €160 million, representing a drop of around 50%.
  • Further market concentration towards AAA high-quality games, which Ubisoft said it countered through the sell-through sales of over 6 million success of Assassin’s Creed 2. However, other company games did not share similar fortunes, particularly James Cameron’s Avatar: The game, and several other non-casual Wii titles reporting lower-than-expected sales.
  • Under performance by back catalog titles due to both of the above-mentioned trends.
  • The postponed release dates for Tom Clancy’s Splinter Cell Conviction and R.U.S.E, previously scheduled for release in the fourth quarter of 2009-10. These would now be released in 2010-1, with Splinter Cell Conviction now expected to hit the stores in April 2010.

Additionally, Ubisoft expects to end the year with a current operating loss before stock-based compensation of around €50 million, against the previously announced target of current operating income amounting to at least €70 million. It attributed this negative swing to the following:
  • Lost earnings due to lower-than-expected sales.
  • Additional depreciation and impairment charges for:
    • under-performing products and back-catalog titles,
    • abandoned projects, as well as certain games scheduled for release in future periods,
    • write-downs of inventories.
  • The postponed release dates for Tom Clancy’s Splinter Cell Conviction and R.U.S.E.

CEO Yves Guillemot said that despite successes such as Assassin’s Creed 2, which is expected to hit nine million sell-in units by end of March 2010, and Just Dance, Ubisoft's Wii success story for the holiday season, it missed its financial targets. He said considerable contraction in the DS market during 2009 particularly affected Ubisoft, causing a €160 million or almost 50% year-on-year drop in the company’s casual segment sales.  Consequently, he said the  company would reduce its exposure to the DS. “We intend to continue to refocus our development resources on our major franchises and on the Xbox360 and PS3, the two consoles which are expected to see sales growth in games for gamers in 2010,” he said.

Outlining its lineup for fiscal 2010-11, Ubisoft said it has planned a greater number of franchise releases than in 2009-10, including Tom Clancy’s Splinter Cell Conviction, a new game in the Tom Clancy’s Ghost Recon series, Prince of Persia The Forgotten Sands, Driver, Raving Rabbids 4 and a new episode of Assassin’s Creed, which will be the first in the series to have an online multiplayer mode. It said the 2010-11 line-up would be more focused on the Xbox 360 and PLAYSTATION 3 consoles, which are expected to experience sustained sales growth in games for gamers in calendar 2010. It plans to release its final sales figures for the third quarter of 2009-10 in February.
 

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