Ubisoft Posts Six Month 09/10 Loss, Talks Wii & Natal News

The unstable situation surrounding the Nintendo Wii today led to Ubisoft revealing a 51.8% drop in sales to 166 million euros for the first fiscal half 2009-10 (Apr-Sep).  As a result, the French publisher recorded an operating loss of 77.7 million euros compared to an operating profit of 33 million euros in the previous year, which led to a net loss for the six-month period of 52 million euros in contrast to a net profit of 24 million euros in the previous period.
 
The publisher retained its previous expectations for the full financial year, with expectations of full year sales of 1.04 billion euros.
 
Yves Guillemot, Chief Executive Officer, stated "First week sales of Assassin’s Creed II, up 32%, with positive initial indications for the second week, combined with an overwhelmingly warm reception from gamers, validates our strategy of developing bigger franchises. Based on this initial data, Assassin’s Creed 2 looks well positioned to outstrip targets while our Wii games have got off to a more contrasted start in a less predictable market. Finally, sales of James Cameron’s Avatar: The Game should benefit from the launch of the movie which is expected to be the biggest blockbuster of this holiday season."

Despite the loss, Ubisoft remains confident that Assassin's Creed II will continue to perform strongly, revealing that in the UK Assassin's Creed II grabbed 38% of the market sales in its second week compared to 12% from its first week sales.

"We think Assassin's Creed is going to overperform the 7.5 million," Guillemot claimed when comparing to the original's overall sales.

Yves Guillemot revealed that data taken from online connections shows that 55% of Assassin's Creed II players come from the Xbox 360, which is in contrast to the original which saw approximately 66% of worldwide sales occuriing on the Xbox 360.

Despite the slowdown in Wii sales, Ubisoft remains upbeat that the format will enjoy a good Christmas.

"On the Wii it's very early to say because we think December will be a very full month for that machine," Guillemot claimed.  "What has happened is because there are very strong games and very successful games on the 360 and PS3 it's putting lots of pressure on the games side of the machine, that's why it has been less popular recently.  But with Christmas we will see all the people that bought the machines that will come back to the market and will buy lots of products."
 
"We think it's too early to say if it's a problem or not yet; it's only on the gamers game side that we have a clear indication that there are lots of games that are very popular on the other machines."
 
"The Wii is still the machine that has great penetration so if we do high quality games on the machine we think it can be very profitable."

When questioned as to whether Ubisoft would follow the likes of EA and cancel titles not expected to perform inline with expectations, Guillemot claimed:
 
"We are pushing more towards very strong products and we are taking less risks on the games that have a lower potential, so we don't do things as drastically as maybe some of our colleagues but we are putting more emphasis onto strong games that have the potential to be very big sellers."
 
"In this case our anticipation shows that for 2010 most of the growth will take place on the Xbox 360 and especially the PS3, which is actually doing very, very well since September/October for our games."
 
Finally the publisher revealed that it is working on 10 titles for Project Natal and between four and five for Sony's Motion Controller, but claimed "that's the picture at the moment, it can change in the next 12 months."
 
Intriguingly, when asked whether its Natal titles will be based on existing franchises or aimed towards a casual market, Guillemot's reply proved hard to decipher.
 
"So I didn't come to the games that are supporting the new functions that those accessories will bring," Guillemot told the conference call.  "I was more speaking about casual games that we are doing on those two machines.  We can consider that on those games it's 70% new property."