A player uses a PS4 controller while playing Ubisoft’s new Watch Dogs Legion video game on October 28, 2020.
Kenzo Tribouillard | AFP via Getty Images
LONDON – Ubisoft’s shares fell 6% on Wednesday morning, despite the French video game giant reporting record quarterly sales. The company also narrowed its guidance for the entire year.
Ubisoft posted sales of 1 billion euros ($ 1.2 billion) in its third fiscal quarter, exceeding its own target and more than doubling the 455.5 million euros of sales that the company recorded in the same period last year .
The company said it benefited from a large list of new titles, including Just Dance 2021, Assassin’s Creed Valhalla and Watch Dogs: Legion. The strong performance was also helped by the momentum of the next-generation consoles from Sony and Microsoft, launched in November.
Ubisoft said its game Assassin’s Creed Valhalla had record sales for the franchise and was the second best-selling game on PlayStation 5 and Xbox Series X and S. Watch Dog: Legions was the fourth best-selling title on next-generation platforms, it said Ubisoft.
But it’s not just the big new releases that are driving Ubisoft’s sales. Ubisoft CEO Yves Guillemot said on the company’s results conference call that he saw a “strong engagement” in his game catalog as well, adding that this trend continued into January.
Rainbow Six Siege, a first-person shooter released by Ubisoft 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 engagement and highly supportive industry trends, the first nine months of the year confirmed that we continue to move towards an increasingly pronounced recurrence of our revenues,” said Guillemot in the company’s third quarter earnings release. Ubisoft Tuesday night.
“So we expect our highly profitable catalog to account for an even larger portion of our business going forward.”
It is a sign of how the video game industry is shifting to games with a longer lifespan and recurring revenue, rather than relying solely on blockbusters.
Video game companies have benefited greatly from the coronavirus pandemic, as people are spending more time at home due to public health restrictions around the world.
Ubisoft reduced its annual revenue and profit guidance on Tuesday. The company said it now expects net sales in 2020/21 of between 2.22 billion and 2.28 billion euros, against 2.2 billion to 2.35 billion euros that it previously expected; and operating income of 450 million to 500 million, tighter than its previous target of 420 million to 500 million euros.
Ubisoft added that it is in the “early stages” of developing a new Star Wars game, after announcing an agreement with Disney’s Lucasfilm Games division. The move marks the beginning of the end of a long-standing exclusive agreement between Lucasfilm Games and Electronic Arts.
EA announced on Monday that it was buying the mobile game developer Glu Mobile for $ 2.4 billion. Asked whether Ubisoft would explore mergers and acquisitions to fuel future growth, Guillemot said the company’s approach was mainly to buy new technologies instead of content.
Ubisoft has yet to decide whether to raise its video game prices to a new $ 70 standard, Guillemot said on Tuesday. Major publishers like Take-Two Interactive are increasing game prices by $ 10 for next-generation consoles. It is the first time that there has been a big price increase in successful games since 2005, and many industry figures say it should have already happened.