Ubisoft reduces sales targets, blames DS and Wii sales

The publisher claims to be refocusing on their major franchises and HD consoles

While third-quarter and full-year 2009-10 sales target figures were previously forecast to be €540 million and €1,040 million respectively, those figures have come down to €495 million and around €860 million. A multitude of reasons were given, which well touch on below.

According to Ubisoft, the casual side of their Wii software lineup—especially Just Dance—has received "relatively robust sales," but what they describe as a "significant correction" of the DSs market in 2009 has brought their overall sales expectations for their casual titles down by 50%.

Ubi says there has been a trend towards "AAA high-quality games" recently, and while Assassins Creed 2 has been rolling in sales for them, not all their releases in this category have matched their hopes. James Cameron’s Avatar: The Game and "several non-casual Wii titles" are listed here, although some might say the Avatar game doesnt exactly belong in this category to begin with.

The publisher also reports lower-than-expected sales for their older games as part of the problem, which they explain with the trends mentioned earlier, along with the delays of Tom Clancy’s Splinter Cell: Conviction and R.U.S.E until the next financial year.

To make matters worse, a current operating loss of around €50 million is now predicted, down from the estimated current operating income of "at least" €70 million. This is essentially from the same issues as described above.

The CEO of Ubisoft, Yves Guillemot, had this to say about the situation.

"Despite a number of highly successful titles, such as Assassin’s Creed 2 – which is expected to reach 9 million sell-in units by the end of March 2010 – and Just Dance – our great Wii success during the holiday season – Ubisoft has not met its financial targets. The considerable contraction in the DS market during the year particularly affected Ubisoft, leading to a €160 million, or almost 50%, year-on-year drop in the Company’s casual segment sales. At the same time, like in 2008, the year 2009 saw the release of many more very high-quality games than in the past. Against this backdrop and with a view to further reducing our exposure to the DS, we intend to continue to refocus our development resources on our major franchises and on the Xbox 360 and PS3, the two consoles which are expected to see sales growth in games for gamers in 2010. Ubisoft has already demonstrated its capacity for success in the high-end games market thanks to Assassin’s Creed 2, with sales 40% higher than for the first title. The 2010-11 line-up – which is stronger in franchises for Xbox 360 and PS3 – reflects our refocusing efforts and should enable us to both win market share and enhance our profitability.”

The 2010-11 lineup announced is quite focused on the HD consoles; the only games that are given to arrive on Wii are Prince of Persia: The Forgotten Sands and Raving Rabbids 4. More titles are promised to be announced later in the year though, so hopefully they have at least a few more games up their sleeves for Nintendo systems.