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A gamer uses a PS4 controller while playing the new Ubisoft Watch Dogs Legion video game on October 28, 2020.
Kenzo Tribouillard | AFP via Getty Images
LONDON – Ubisoft shares fell 6% on Wednesday morning, as the French video game giant announced record quarterly sales. The company also lowered its forecast for the full year.
Ubisoft posted revenue of € 1 billion ($ 1.2 billion) in its fiscal third quarter, exceeding its own target and more than doubling the € 455.5 million in revenue. business that the company had recorded at the same time a year ago.
The company said it has enjoyed a solid roster of new titles, including Just Dance 2021, Assassin’s Creed Valhalla and Watch Dogs: Legion. The strong performance was also helped by the momentum of the next generation consoles from Sony and Microsoft, which launched in November.
Ubisoft said its game Assassin’s Creed Valhalla generated record sales for the franchise and was the second best-selling game on PlayStation 5 and Xbox Series X machines and S. Watch Dog: Legions was the fourth best-selling title on the next-generation platforms, said Ubisoft.
But it’s not just big news that drives Ubisoft sales. Ubisoft CEO Yves Guillemot said during the company’s earnings call that he also saw “strong engagement” in its backend game catalog, adding that this trend continued in January.
Rainbow Six Siege, a first-person shooter released by Ubisoft in 2013, now has 70 million players, said CFO Frederick Duguet. This is an increase of 15 million users compared to last year. Rainbow Six Siege is a popular title in esports tournaments.
“In a context of growing engagement and very favorable sector trends, the first nine months of the year have confirmed that we continue to evolve towards an increasingly pronounced recurrence of our revenues”, said Guillemot in the publication of Ubisoft’s third quarter results on Tuesday night.
“Therefore, we expect our highly profitable back catalog to represent an even larger part of our business in the future.”
It is a sign of how the video game industry is moving towards games with a longer lifespan and recurring revenue rather than relying solely on big hits.
Video game companies have benefited greatly from the coronavirus pandemic, as people spend more time at home due to public health restrictions around the world.
Ubisoft cut its full-year forecast for revenue and profit on Tuesday. The company said it now expects 2020/21 revenue of between € 2.22 billion and € 2.28 billion, up from € 2.2 billion to € 2.35 billion previously; and operating income of 450 million to 500 million euros, tighter than its previous target of 420 million to 500 million euros.
Ubisoft added that it was in the “early stages” of developing a new Star Wars game after announcing a deal with Disney’s Lucasfilm Games division. The move marks the beginning of the end of a long-standing exclusivity agreement between Lucasfilm Games and Electronic Arts.
EA said on Monday it was buying mobile game developer Glu Mobile for $ 2.4 billion. Asked whether Ubisoft will explore mergers and acquisitions to fuel future growth, Guillemot said the company’s approach is mostly to buy new technology rather than content.
Ubisoft has yet to make a decision on whether to raise the prices of its video games to a new standard of $ 70, Guillemot said Tuesday. Big publishers like Take-Two Interactive are raising game prices by $ 10 for next-gen consoles. This is the first time that there has been a major increase in the prices of blockbuster games since 2005, and many industry figures say it is long overdue.
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