Update on third fiscal quarter performance and annual targets
- 2009-10 targets revised downwards
- Releases of Tom Clancy’s Splinter Cell Conviction™ and R.U.S.E™ postponed to 2010-11
§ Initial information on the 2010-11 line-up
Paris, January 13, 2010 – Today, Ubisoft updated its 2009-10 targets.
The sales targets for third-quarter and full-year 2009-10 have been revised downwards to €495 million and around €860 million respectively, from the previously announced figures of €540 million and €1,040 million.
These downward revisions are due to the following factors:
- A further correction in the market for DS titles. 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%.
- Further market concentration towards AAA high-quality games. Ubisoft has demonstrated its ability to react to this trend through the success of Assassin’s Creed 2, which has achieved sell-through sales topping 6 million. However, not all of the Company’s games have reaped the full benefits of the measures implemented, with James Cameron’s Avatar™: The game and several non-casual Wii titles reporting lowerthan-expected sales.
- Underperformance 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™, which were previously scheduled for the fourth quarter of 2009-10, and will now be released in 2010-11. Splinter Cell Conviction™ is now expected to hit the stores in April 2010.
In addition, Ubisoft now expects to end the year with a current operating loss before stock-based compensation of around €50 million, rather than the previously announced target of current operating income amounting to at least €70 million. This negative swing reflects 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™.
Yves Guillemot, Chief Executive Officer, stated “Despite a number of highly successful titles, such as Assassin’s Creed 2 – which is expected to reach 9 million sell-in units by the end of March 2010 – and Just Dance – our great Wii success during the holiday season – Ubisoft has not met its financial targets. The considerable contraction in the DS market during the year particularly affected Ubisoft, leading to a €160 million, or almost 50%, year-on-year drop in the Company’s casual segment sales. At the same time, like in 2008, the year 2009 saw the release of many more very high-quality games than in the past. Against this backdrop and with a view to further reducing our 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. Ubisoft has already demonstrated its capacity for success in the high-end games market thanks to Assassin’s Creed 2, with sales 40% higher than for the first title. The 2010-11 line-up – which is stronger in franchises for Xbox360 and PS3 – reflects our refocusing efforts and should enable us to both win market share and enhance our profitability.”
Initial information on the 2010-11 line-up
The 2010-11 fiscal year will see 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. The 2010-11 line-up will be more focused on the Xbox 360® and PLAYSTATION® 3, the consoles which are expected to experience sustained sales growth in games for gamers in calendar 2010. Other new franchises and innovations will also be announced throughout the year.
Ubisoft will release its final sales figures for the third quarter of 2009-10 in February.
The Company will organize a conference call at 6.15 p.m. (CET) this evening, which will be accessible via the following address: www.ubisoftgroup.com/ir
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This statement may contain estimated financial data, information on future projects and transactions and future business results/performance. Such forward-looking data are provided for estimation purposes only. They are subject to market risks and uncertainties and may vary significantly compared with the actual results that will be published. The estimated financial data have been presented to the Board of Directors and have not been audited by the Statutory Auditors. (Additional information is specified in the most recent Ubisoft Registration Document filed on July 1, 2009 with the French Financial Markets Authority (l’Autorité des marchés financiers)).
Ubisoft is a leading producer, publisher and distributor of interactive entertainment products worldwide and has grown considerably through a strong and diversified line-up of products and partnerships. Ubisoft has offices in 28 countries and sales in 55 countries around the globe. It is committed to delivering high-quality, cutting-edge video game titles to consumers. Ubisoft generated sales of €1,058 million for the 2008-09 fiscal year. To learn more, please visit: www.ubisoftgroup.com.
© 2010 Ubisoft Entertainment. All Rights Reserved. Assassin’s Creed, Rabbids, Tom Clancy, Splinter Cell Conviction, Ghost Recon, R.U.S.E, Driver, Just Dance, Raving Rabbids, Ubisoft and the Ubisoft logo are trademarks of Ubisoft Entertainment in the U.S. and/or other countries.
© 2009 Ubisoft Entertainment. All Rights Reserved. Based on Prince of Persia® created by Jordan Mechner. Prince of Persia and Prince of Persia The Forgotten Sands are trademarks of Jordan Mechner in the US and/or other countries used under license by Ubisoft Entertainment.
James Cameron’s Avatar: The Game © 2009 Twentieth Century Fox Film Corporation. Game Software excluding Twentieth Century Fox Film Corporation elements: © 2009 Ubisoft Entertainment. All Rights Reserved. James Cameron’s Avatar: The Game, James Cameron’s Avatar and the Twentieth Century Fox logo are trademarks of Twentieth Century Fox Film Corporation. Licensed to Ubisoft Entertainment by Twentieth Century Fox Film Corporation. The Lightstorm Entertainment logo is a trademark of Lightstorm Entertainment, Inc.