Ubisoft Sees Savior in Online, HD Gaming

Revenues at the French gaming giant slip in first half but stronger online sales help cut losses.

COLOGNE, Germany – Sales at French games giant Ubisoft fell nearly 5 per cent in the six months to Sept. 30 but stronger sales of online games helped trim the company’s losses, which fell by almost two thirds compared with the same period last year.

Ubisoft booked first half revenues of $342 million (€248.5 million), a 4.6 per cent drop on 2010, while net losses came in at $51 million (€37.1 million) compared to €90 million a year earlier.

In addition to stronger per-title profits from high-definition versions of its games, online revenue was a major factor behind Ubisoft’s best-than-expected results. Online sales shot up 85 per cent in the first half, to $41 million (€30 million), accounting for 12 per cent of total sales for the period, against 6 per cent a year earlier. Ubisoft is shifting more of its resources towards online gaming. Just last week, Ubisoft acquired Finnish-based developer RedLynx, creators of the downloadable motorcycle gaming franchise Trials. This came after the purchase, in September, of French free-to-play developer Owlient, whose Howrse Internet gaming platform has nearly 2 million monthly active users.

Ubisoft has also embraced casual gaming on Facebook, launching CSI: Crime City on the social media site and planning a full line-up of casual online games based on hit TV shows, including NCIS and House, M.D..

“We are now starting to reap the benefits from the work we have undertaken to ensure more frequent releases of our high definition franchises…as well as from the immense opportunities offered by the Casual segment and our continued strong growth in the Online segment,” said Ubisoft CEO Yves Guillemont.

Guillemont was bullish about the company’s full-year results, pointing to the new releases in its hit Just Dance and Assassin’s Creed franchises as well as the upcoming bow of its music title Michael Jackson The Experience on iPad. Guillemont said Ubisoft was on track to hit its forecast targets of revenues of between $1.45 – $1.49 billion (€1.04 - €1.08 billion) and operating income of between $55 - $83 million (€40 - €60 million) for the full fiscal year. The company expects to return to profits by the end of the 2012/13 fiscal year.