Sections

"There's a change in the way games are exploited in the market"

Ubisoft execs explain why they cut unit sales projections by 30% while total revenues are virtually unscathed

The era of annualized franchises may be drawing to a close, and not just because Ubisoft let Assassin's Creed take a year off. In a post-earnings conference call today, Ubisoft CFO Alain Martinez detailed just how dramatically the company's success with live ops titles like Rainbow Six Siege is reshaping its plan for the future.

During the call, Martinez went over some revisions to the company's long-term projections for the fiscal year ending in March of 2019. While Ubisoft downgraded its total revenue target slightly from €2.2 billion to around €2.1 billion, digging a little deeper into the numbers shows a more dramatic shift in its strategy.

Martinez said that the previous forecast was put together expecting that Ubisoft would be releasing five major AAA games in established franchises for the year; the revised numbers only take into account three big AAA games from established franchises and one new IP. What's more, the old projection was put together with the expectation of selling 40 million units across the portfolio, while the new number only considers sales of about 28 million units. Part of that is due to the smaller number of major releases, but a large part is also due to the switch to games-as-a-service.

"What's very important to consider is there's a change in the way games are exploited in the market," Ubisoft CEO Yves Guillemot said, noting that the company would rather continue delivering live content for a game like Rainbow Six Siege than to introduce a new full sequel in the series, which would split the player base across multiple titles. That means series that might have released on a steadier clip in the past can now go longer between installments while still contributing to the bottom line. In fact, Ubisoft expects player recurring investment (everything players spend on live ops titles after the initial purchase) to represent more than 25% of the company's total revenues. It's also worth noting that despite the lowered unit sales and overall revenue figure, Ubisoft left its operating income guidance for the year unchanged.

As one might have expected given this shift in strategy for Ubisoft, the company's new IP slated for fiscal 2019 will be a multiplayer focused live operations game.

[CORRECTION]: This article originally misidentified Alain Martinez as Ubisoft's EMEA head Alain Corre. We regret the error.

Related stories

Ubisoft's operating income grows 40% as digital takes 50% of sales

Ghost Recon Wildlands and For Honor were strong performers for the publisher; Assassin's Creed and Far Cry confirmed for current fiscal year

By James Brightman

New Ubisoft game marks its next big move into China

Publisher partners with Playcrab and Tencent

By Christopher Dring

Latest comments

There are no comments on this article yet. Why not be the first to post one?

Sign in to contribute

Need an account? Register now.