Losses increase at Ubisoft despite growing sales

French publisher Ubisoft has recorded a net loss of €89.8 million ($122.2m / £76.1m) for the first half of the financial year, up 34.5 per cent compared to the same period last year.

Sales were up at the company, from €166 million ($226m / £140.6m) to €260 million ($353.9m / £220.3m) with the publisher noting a two-fold increase in digital sales, helped by Scott Pilgrim Vs The World on XBLA and PSN, general DLC and PC titles.

Tom Clancy's HAWX 2 and RUSE did not meet sales expectations said the French publisher, but back catalogue performance of Just Dance were solid.

Two fourth quarter releases, due for the beginning of 2011, have been delayed into the next financial year - Tom Clancy's Ghost Recon: Future Soldier and Driver: San Francisco.

"Ubisoft continued to win market share during the first nine months of 2010," said CEO Yves Guillemot. "Our sales figure for the first half of fiscal 2010-11 was boosted by a greater number of releases of high definition games, solid back-catalogue sales and very positive revenue momentum from our digital activities.

"The market environment continues to be tough and, although our gross profit rose sharply, the increase was lower than we expected and we had to accelerate depreciations on certain released titles."

According to Guillemot, sales of Just Dance 2 - released in mid-October - are up 75 per cent and pre-orders of Assassin's Creed: Brotherhood are up 25 per cent. Kinect title Your Shape: Fitness Evolved is the best-selling third-party title for the motion controller in the US.

He added that the company expects sales of €960 million ($1.3bn / £813m) for the full financial year.

"We are continuing to overhaul our studios roles, operations and structures in order to meet the new challenges in our industry and are focused on offering highly innovative and creative products, as well as on enhancing quality levels, releasing new iterations of our major franchises on a more regular basis, providing gamers with an ever-richer online experience and attracting a constantly growing number of casual gamers."

Ubisoft also revealed that it has cancelled certain projects in production, and reorganised elements of the business, with a one-off cost of €62 million.

"Ubisoft is taking measures to adapt its structure to the major changes in the industry by reorganising the roles and operations of its studios, which has resulted in the termination of certain projects. Consequently, the company recognised €62.1 million in non-recurring reorganisation charges in the first half of 2010-11."