Ubisoft Sales Miss Expectations, Publisher Expects Big Fourth Quarter

Ubisoft today announced its earnings for the third quarter, falling short of its expectations for the period. The company also revealed some big moves for the coming fiscal year, including Assassin’s Creed taking a break and another Watch Dogs game.

Sales for the quarter were €561.8 million, down from €809.7 million in the prior year and short of the €600 million target. The first nine months of the year significantly trail last year’s performance. Ubisoft has reduced its sales and operating income targets for the year.

The first nine months of 2014-15 were €1.29 billion compared to €769.1 million for 2015-16. Fourth quarter will likely be significantly stronger, with the release of The Division and Far Cry Primal on current-gen and PC.

The publisher’s digital profile and back catalog continue to grow. For the first nine months of the year, digital sales increased from 21.2 percent of total to 27 percent. Back catalog increased 42.6 percent during the first nine months, reaching €280.8 million.

Ubisoft expects that the 2016-17 will see increases in sales and operating income, even without the release of Assassin’s Creed. The company has laid out a number of games for the coming fiscal year, including For Honor, South Park The Fractured But Whole, Ghost Recon Wildlands, Watch Dogs, and a new “high-potential AAA brand.” More Rainbow Six Siege DLC will also be released during the coming fiscal year.

Our Take
Ubisoft’s decision to give Assassin’s Creed a break is one that will ultimately preserve the brand for the long-term. Filling in with a Watch Dogs game, bringing back Ghost Recon, and delivering a new South Park RPG all have huge potential. For Honor has the chance to strike big if it is content-rich enough and priced to match its offerings.