Ubisoft Reports Record Sales

[Kristo]

Yesterday, Ubisoft <a href="/http://www.ubisoftgroup.com/News/Info.a ... ">reported record sales</a> of over 250 million euros in Q3 (October-December in the European fiscal year). Riding a wave from the release of Peter Jackson's King Kong, and Prince of Persia: The Two Thrones, revenues are up 29% from this point last year. Ubisoft CEO Yves Guillemot said, "2005 was another successful year. We gained additional market share and further strengthened the Ubisoft brand. Ubisoft is now established as one of the major players in our industry with highly valuable assets." Despite a cooling PC game market in the United States and Europe, forecasts for the end of FY 05/06 are in line with last year's performance.



So what does this mean for fans eagerly awaiting Heroes 5? Unlike its predecessor 3DO, this company does not appear to be going away anytime soon. Also, Heroes 5 is <i>not</i> mentioned among the titles scheduled for release in Q4. That is not surprising, given that an official release date has not been announced, but it is perhaps good news for those who signed the Save Heroes V petition. In all, their quarterly report shows they are focused on gaining ground in key world markets and improving their status as a major industry player. This is not the face of a company looking to simply make a quick buck off the Might and Magic franchise. Ubisoft is here to stay.



If you are interested in further details about Ubisoft's financial performance, a PDF copy of their quarterly report is <a href="/http://www.ubisoftgroup.com/resources/b ... >available here</a>.

If you would like to take a look at the original page visit this link:
https://www.celestialheavens.com/1138405041

[Kalah]

Well, this is good news to me; a sound financial backing for Heroes V development and post-release support is more likely when the company's got the money..

[Psychobabble]

It's sometimes a sign of a struggling company that they trumpet their revenue increases while burying their (poor) net revenue/profit results. Any large company can make revenue, it's harder to make profit. In that quarterly update the only reference to net revenue I could find was forecasted and the sentence didn't really make sense anyway:

For the fourth quarter ending March 31, 2006, the Group now anticipates revenues of around 130 million euros. Therefore, for the fiscal year 2005-2006, the Company expects net revenues close to 530 million euros and positive current operating income, before stockbased compensation. This compares with the guidance previously provided of, respectively, 600 million euros and 52.5 million euros.

That "respectively" there doesn't make any sense because the numbers are around the wrong way and/or are upward estimates (not reductions as they had said in the leadup).

[Continuity]

It's official, H5 has been delayed: http://www.gamespot.com/news/6143245.html

[Kristo]

They're at around 400 million euros in revenue for the year so far. Add in 130 million for Q4 and you get the 530 million number. The 530 million euro estimate is the same revenue level as last year (see the 2005 annual report). Unless their costs have gone way up and they're not telling us, that should lead to about a 21 million euro net income.

[Psychobabble]

Ah, just looked at that statement again "positive current operating income" is their forecast profit now. Ie it'll be just postivie/negligable, this estimate is down from the previously estimated $53m.

[Kristo]

I'm interested in this year's annual report, which will probably come out toward the end of April. In the past, Ubisoft has carried a lot of debt. That's not necessarily a bad thing - it can help a young company expand quickly (such as opening a new development office in Montreal). But it puts a premium on performance. If the bond holders all decide to cash out at the same time, the company will basically be done. Reducing their debt level would be a good sign that they're maturing enough to stand on their own.