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Home / Technology / The share falls 6% despite the 3rd quarter sales record

The share falls 6% despite the 3rd quarter sales record



A player uses a PS4 controller while playing the new Ubisoft video game Watch Dogs Legion on October 28, 2020.

Kenzo Tribouillard | AFP via Getty Images

LONDON – Ubisoft shares fell 6% on Wednesday morning, despite the French video game giant reporting record quarterly sales. The company also limited the guidance for the entire year.

Ubisoft had sales of 1

billion euros ($ 1.2 billion) in its fiscal third quarter, exceeded its own target and more than doubled the sales amount of 455.5 million euros the company booked in the same period a year ago.

The company said it benefited from a strong slate with 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, which was launched in November.

Ubisoft said that the Assassin’s Creed Valhalla game delivered 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 big new releases that are driving Ubisoft’s sales. Ubisoft’s CEO, Yves Guillemot, said in the company’s earnings call that “strong commitment” was also seen in the game catalog, and added that this trend continued into January.

Rainbow Six Siege, a first-person shooter Ubisoft released in 2013, now has 70 million players, said CFO Frederick Duguet. This is an increase of 15 million users from last year. Rainbow Six Siege is a popular title in esports tournaments.

“In the context of growing engagement and very supportive industry trends, the first nine months of the year confirmed that we continue to move towards an increasingly pronounced repetition of our revenue,” Guillemot said in Ubisoft’s third-quarter earnings report Tuesday night.

“Therefore, we expect that our very profitable back catalog will make up an even larger share of our business in the future.”

It’s a sign of how the video game industry is moving towards games with longer lifetimes and recurring revenue instead of just relying on big hit 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 narrowed the full-year guide to sales and earnings on Tuesday. The company said that it now expects a turnover for 2020/21 of between 2.22 billion and 2.28 billion euros, against the 2.2 billion to 2.35 billion euros it had previously expected; and operating revenues 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 an agreement with Disney’s Lucasfilm Games division. The move marks the beginning of the end of a long-term exclusivity agreement between Lucasfilm Games and Electronic Arts.

EA announced on Monday that it bought mobile game developer Glu Mobile for $ 2.4 billion. Asked if Ubisoft will explore mergers and acquisitions to promote future growth, Guillemot said the company’s approach was mainly to buy new technology instead of content.

Ubisoft has not yet made a decision to raise the price of video games to a new standard of $ 70, Guillemot said on Tuesday. Major publishers like Take-Two Interactive are raising $ 10 prices for next-generation consoles. This is the first time there has been a large price increase for card games since 2005, and many figures in the industry say that it is a long time.


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