A player uses a PS4 controller while playing the new Ubisoft Watch Dogs Legion video game on October 28, 2020.
Kenzo Tribouillard | AFP via Getty Images
LONDON – Ubisoft shares fell 6% on Wednesday morning, although the French video game giant recorded record quarterly sales. The company also reduced its orientation for the entire year.
Ubisoft recorded sales of 1 billion euros ($ 1.2 trillion) in its third fiscal quarter, exceeding its own target and more than double the 455.5 million euros in sales that the company recorded in the same period of the previous year.
The company said it benefited from a strong list of new titles, including Just Dance 2021, Assassin’s Creed Valhalla and Watch Dogs: Legion. Strong performance was also boosted by the momentum from Sony and Microsoft’s next-generation consoles, which launched in November.
Ubisoft said its Assassin’s Creed game Valhalla hit record sales for the franchise and was the second best-selling game on PlayStation 5 and Xbox Series X and S machines. Watch Dog: Legions was the fourth best-selling title. on next-generation platforms, Ubisoft said.
But it’s not just the big news that is driving Ubisoft’s sales. Ubisoft CEO Yves Guillemot said in the firm’s earnings call that he saw a “strong commitment” in his later catalog of games, adding that this trend would continue until January.
Rainbow Six Siege, a first-person shooter game that Ubisoft released in 2013, now has 70 million players, said CFO Frederick Duguet. This is an increase of 15 million users over last year. Rainbow Six Siege is a popular title in sports tournaments.
“In a context of growing commitment and very supportive industry trends, the first nine months of the year confirmed that we continue to move towards an increasingly pronounced recurrence of our revenue,” Guillemot said at the profit launch of Ubisoft’s third quarter Tuesday evening.
“Therefore, we expect our highly profitable secondary catalog to account for an even larger portion of our business in the future.”
It’s a sign of how the video game industry is moving toward longer-lived, recurring-income games instead of relying solely on big box office hits.
Video game companies have benefited greatly from the coronavirus pandemic as people spend more time at home due to public health restrictions around the world.
Ubisoft lowered its year-over-year revenue and profit targeting on Tuesday. The company said it now expects net sales for 2020/21 of between 2222 and 2228 million euros, compared to the 2.2 billion to 2.352 billion euros it had previously expected; and operating income of 450 to 500 million, tighter than the previous target of 420 to 500 million euros.
Ubisoft added that it is in the “early stages” of developing a new Star Wars game after announcing a deal with Disney’s Lucasfilm Games division. The move marks the beginning of the end of a long-standing exclusivity agreement between Lucasfilm Games and Electronic Arts.
EA announced Monday that it is buying mobile game developer Glu Mobile for $ 2.4 billion. Asked whether Ubisoft would explore mergers and acquisitions to fuel future growth, Guillemot said the firm’s focus was primarily on buying new technologies rather than content.
Ubisoft has yet to make a decision on whether to raise the prices of its video games to a new standard of $ 70, Guillemot said Tuesday. Big publishers like Take-Two Interactive are raising gaming prices by $ 10 for next-generation consoles. It is the first time there has been a major price increase in box office games since 2005 and many industry figures say it had been expected for a long time.