Publishing and developing giant Ubisoft has today revealed its Q1 2009 financial results, the long and short of it being a 51% decline in overall sales revenue from the same period last year, leading to four delays.
The company comes in at €83 million ($118m USD) this quarter; last year's figures brought the company to an impressive $240m. The numbers were below Q4 projected estimates by 12.6%, or about $135m.
Ubisoft attributes the new figures to a slowdown in DS software sales old and new in the US and Europe ("more pronounced than expected"), much lower back-catalogue sales on the PS3 and Xbox 360 than the same period last year, and worse than expected industry conditions.
On the bright side, Call of Juarez: Bound in Blood and Anno performed as anticipated, with the latter receiving great ratings across all platforms; a growth in share on the Wii is also noted.
As a result of the drops, a 54% decrease on the previously projected $185m outlook set for Q2 is set; 2009-10 total targets are revised to $1.48 billion, compared to previous guidance of about $1.57 billion; based on the "very warm response" of Asassin's Creed II at E3 this year, sales for Q2 are expected to be stronger.
Q3 and Q4 will be affected as well, with Splinter Cell Conviction, Red Steel 2, Ghost Recon and I Am Alive all receiving delays. The former two were both set for Q3, and will now be pushed back to the following quarter; the latter two were set for Q4 and will be moved to sometime in fiscal 2010-2011.
Yves Guillemot, Chief Executive Officer, stated: "We are currently experiencing a very sharp slowdown in our sales for Nintendo DS as well as sales of back-catalog titles, in the context of a market that is tougher than anticipated. This will have a significant impact on our first-half showing. Against this backdrop, the solid performance of our Wii titles combined with the successful launches of Anno and Call of Juarez are points of satisfaction and demonstrate that good products are continuing to sell well. We are disappointed that we have to postpone the release of several major games but we consider that this choice is the best one in the long-term interests of Ubisoft. Lastly, we are having to adjust our full-year targets to take into account the fall in business over the first half. The excellent response to our games at E3, as well as the high buzz generated for titles such as Assassin's Creed 2, Splinter Cell Conviction and Avatar, reinforce our belief that the company can achieve strong growth in the second half of the fiscal year."
Guillemot has elaborated in interviews, as well, stating piracy on the DS -- in America, as opposed to Europe -- is a lot of the reason for their misfortune this time around. Rather than "cracking down" though, Ubisoft will be taking a cue from Atlus:
"Piracy is strong so we are working to put new figurines and new elements in the boxes that will change that in the future," said Guillemot, later continuing, "We see when we put other things with the product (people) go and buy the game. We need to make sure that the value is better when they buy the box then when they download (the game) from the Internet."
In our opinion, this is definitely the smart way to go, so Ubisoft, you have our respect.
PC piracy is also noted to be "quite a lot", something the CEO implies they are working on internally, saying, "We are working on a tool that would allow us to decrease that on the PC starting next year and probably one game this year." Whatever could it be? With any luck, it will be good news for legitimate customers, as an internally developed form of DRM is likely to be less inconvenient than an externally developed one, it being less familiar and therefore harder to implement properly.
That's all for this quarter -- see you next time.
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