Ubisoft posts 44m net loss

French publisher Ubisoft has reported sales of €871m for the year ending March 31st 2010 – a decrease of 18 per cent year-on-year.

Operating losses hit €60m, compared to an operating income of €128.7m in the same period the year before. Net losses totalled €44m, down from 08/09’s €68.8m profit.

Sales for Q4 hit €210m, an annual increase of 1.9 per cent, thanks in part to the better-than-expected performance of Just Dance, global sales of which have now hit 3m, and a very strong showing from Assassin’s Creed II, sales of which have very nearly reached 9m.

Ubisoft also claims that sales of Red Steel 2 were in-line with forecasts and Avatar, which is widely regarded as a software flop, were ahead of forecasts – particularly on Wii.

The success of Just Dance saw Nintendo Wii emerge as the most lucrative platform, claiming 26 per cent of Ubisoft’s total sales. Next up was PS3 with 23 per cent and Xbox 360 with 22 per cent.

Back catalogue sales fell from €220m last year to €110m. Ubisoft blamed the impact of excess inventories of DS games which the company had to clear or write down in a very competitive environment also marked by high levels of piracy” for the dip.

The publisher’s European market share to date in 2010 stands at 9.9 per cent – up from the 8.5 per cent it had at this stage in 2009. It also lays claim to the second highest market share in the UK at 12.1 per cent.

The global economic crisis had a pronounced impact on the video game industry in 2009, which contracted by nearly 10 per cent year-on-year, CEO Yves Guillemot stated.

Ubisoft’s sales were hit particularly hard, falling 18 per cent over the full year despite a stabilisation in the second half of the year, when figures came in on a par with the corresponding period of 2008-09.

This overall contraction in sales, combined with additional write-downs recorded for games already launched as well as for upcoming releases, led to a €60m operating loss.”

Ubisoft predicts that Q1 2010/11 sales to reach €145m and a return to profitable growth for the full fiscal year.

"We also expect to see the first concrete results from our investments in on-line games and services," the financial statement claims. "The upcoming launches of new consoles, including Natal and Sony Move, should enable us to capitalise on the technology investments that we have undertaken in recent years and re-energise the casual games segment.

"At the same time, we will continue to reorganise our studios and enhance our development teams’ productivity.

"These reorganisational moves will enable us to release new iterations of our major franchises on a more regular basis, and guarantee high quality levels."