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Sudden drop in DS sales forces Ubisoft to drop predictions and delay Red Steel 2, Splinter Cell: Conviction, Ghost Recon and I Am Alive...
Reporting a decline in sales for the first fiscal quarter ended June 30th 2009, Ubisoft today announced that a number of titles have been delayed.
Both 'Splinter Cell: Conviction' and 'Red Steel 2' were originally due in the third quarter have now been pushed into the fourth quarter, meaning a delay into 2010 that will see both titles missing out on the lucrative Christmas market. In addition, both 'Ghost Recon' and the troubled 'I Am Alive' have been pushed into the next fiscal year, beginning April 1st 2010.
Sales for the first quarter came to 83 million euros, representing a decrease of 50.6% compared to 169 million euros recorded for the same period of 2008-09. The figure is 12.6% below the 95 million euros that Ubisoft had previously forecast.
Beyond the global financial situation, Ubisoft attributes the underperformance to a sudden and dramatic decline in sales of Nintendo DS titles, which impacted back-catalogue sales and new titles. Evaluating the breakdown of sales according to format reveals that the Nintendo DS titles accounted for 26% of total sales compared to 37%, while the PlayStation3 also dropped to 13% compared with 21% in the previous year.
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.
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."
With a limited release schedule for the second quarter ending September 30th 2009, Ubisoft expects sales to stand at approximately 80 million euros, representing a 54% decrease compared to the same period in 2008-09. This forecast represents a revision of the 130 million euros that Ubisoft had previously predicted for the second quarter.
As a result of the downturn, Ubisoft has also revised its targets for the full fiscal year. Sales are expected to reach 1.040 billion euros, compared to previous guidance of 1.1 billion euros. The revised figure reflects Ubisoft's expected poor performance during the first half of the financial year. The Frecnh publisher is maintaining that it will see a 23% increase in sales growth for the second half, solely based on higher than expected sales assumptions for Assassin's Creed 2.