Ubisoft exceeds expectations, lowers guidance

January 26, 2006 1:04PM PST

Citing "weakness" in the game market, the French publishing titan lowers estimates, despite a robust third fiscal quarter.

The good news: Ubisoft ended the calendar year 2005 with a bang. The France-based publisher had a record-breaking third fiscal quarter ending December 31, 2005, in which it grossed 250 million euros ($305.7 million), a 35 percent year-on-year rise--above analyst's expectations. In a statement, the company singled out two titles as the keystones to its success: Prince of Persia The Two Thrones and (deep breath) Peter Jackson's King Kong: The Official Game of the Movie.

Yves Guillemot, Ubisoft's chief executive officer and raconteur-at-large, ladled out praise in a statement. Restating the obvious, he proclaimed that "2005 was another successful year ... With years of continuous progress behind us, we ranked third independent publisher in Europe in 2005 and fifth in North America. Ubisoft is now established as one of the major players in our industry with highly valuable assets." Ubisoft estimated it had a 4.5 percent market share in the US in 2005, compared with 3.5 percent in 2004.

But despite the Gallic executive's aplomb and Ubisoft's solid numbers, the company actually lowered its outlook for its current fiscal year. The company now anticipates revenues of approximately 130 million euros ($158.9 million) for the quarter ending March 31, 2006, and revenues close to 530 million euros ($648 million) for the year that ends on the same date. During the previous year, Ubi's net haul was 600 million euros ($733.6 million).

Ubisoft said the main reason for the lowered guidance was "The weakness of the video game software market in the U.S. and in Europe." Ironically, Ubisoft also pinned the blame on the same game that it praised for boosting its fiscal third-quarter earnings. "With four million units already in place, lower than initially anticipated reorders of Peter Jackson's King Kong: The Official Game of the Movie are expected for the fourth quarter," the company said in a statement. The film, which inspired the game, has also been below box office analysts' expectations.

The other big culprit behind Ubi's lowered guidance was the postponement of Splinter Cell Double Agent from the company's fiscal fourth quarter to September. The Tom Clancy-inspired multiplatform series has become a linchpin of the company's release calendar and the highly anticipated game's delay, which has series hero Sam Fisher going undercover in a crime syndicate, will severely impact the company's bottom line.

"Ubisoft is disappointed that our full year results should come below our initial guidance," the company said in a statement.

By Tor Thorsen

25 comments

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HyperMetaDragon

Poor babies. Lol. Regardless of all of this, Ubisoft still rocks.

comthitnuong

good.....

morph_sa

Hope this isn't a nail in the coffin for the smaller titles they publish.

arjnav

Wait a go ubisoft. these guys publish some quality games. Splinter Cell and the reimagined PoP are amazing titles and not forgetting Far Cry. I personally expect Ubisoft to rise to one of the top 3 publishers in the gaming industry.

JetX85

It's tough with the PoP series ending and I don't think they've got any more MYST games coming out either. If it helps them stay in the game then good for them for showing good business judgement.

hush404

Ubisoft one of my fav devs. Ubisoft (for the most part) creates incredible games. I really hope they never give into offers from EA for a buyout.

Viquist

Good for Ubi... good games, none I'm interested in but good games none the less

its_inevitable

Ubisoft are the best publisher IMO, you can count there bad games on 1 hand.

Hyperblade

well PoP series is over, and Spinter Cell can only have so many games till it gets tired and Ubi will run out of ideas. they need something fresh and original from now on.

NeoJedi

I'm very proud of Ubi.

carlopret

Well, I personally enjoyed playing the first two. Cant wait to play the third and hopfully not the last (dont ask). Who knows, maybe a movie could come out of it. Ya, ya, I know the game to movie transition and visa versa, but if they can get a really good director (Peter, Steven) with a good story line of cause, it will really be good.

YukoAsho

UbiSoft probably understands that they can't rely on a single franchise forever. It's why they've worked so hard to establish Prince of Persia. Personally, I hope to see a few more good franchises, along with the rest of the great games they release.

i_love_my_ds

Ubisoft makes some of the best games out there. Prince of Persia and Splinter Cell are some of my favorite series.

Game-o_O

Hes hating on the game because of the weapon choice has been done in a castlevania game lmao!

i_love_my_ds

Ubisoft makes some of the best games out there. Prince of Persia and Splinter Cell are some of my favorite series.

Night_Frost

They can't rely on Tom Clancy Games for long, at least they're making games that don't suck at all, unlike EA (save for BLACK, that looks awesome

Imavnas

I dont know why it got good reviews. To me PoP3 sucked. Rented it and felt like I was playing a game just to find out what I knew was going to happen anyway. The Dark Prince wasnt so COOL or anything of the sort either, mainly cause of his degrading health but also because his "whip" combos were not very exiciting (not to mention a whip wasnt a very original idea, the first PS2 Castlevania game incorporated a whip, and to me it did it far better, even if that game too wasnt up to expectations). Also, its PS2 counterpart had horribly dull looking graphics in my opinion. Splinter Cell is to me the only good franchise they have. And even then.

ssj4_2004

I really like Ubisoft they make some of the best games. But they need more franchises. They can't rely on Splinter Cell forever...

jlaing2607

POP has become a solid series.

Donkeljohn

This may be the year of the weakening and the consolidation.

n2Deepeth

I'm pretty glad PoP3 did well, considering that the first one didn't do so well. It's good to see that these two awesome games sold well.

XlpranksterlX

I really like ubisoft and their games. Its cool that they made alot of money on their games and what not but i think they set the bar low so they can be pleasently surprised.

ufopuller

Another French company to watch

MTGDallas

This is what happens when you only promote 2 franchises instead of trying to promote all of the franchises you publish.

o_sausage

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