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Ubisoft sees giant slide in sales

Written by Andre Yoskowitz (Google+) @ 18 May 2010 23:35 User comments (12)

Ubisoft sees giant slide in sales Ubisoft, the games publisher behind the new "always on" DRM, has disappointed investors this week, reporting an almost 18 percent slide in revenue for the fiscal year.
For the year, the company posted sales of $1.1 billion, and a net loss of $54 million.

The loss was mainly due to increases in R&D, which rose to $376 million, up 36 percent year-on-year.

Ubi says its top selling game was Assassin's Creed II (which uses the controversial DRM) and moved 9 million units since launch.

Additionally, Ubi saw its market share in North America rise to 6.8 percent from 5.3 percent last fiscal year. Despite the growth, the overall market, which remains in turmoil, has not helped with ongoing sales, concedes CEO Yves Guillemot: "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. 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 60 million operating loss."

Despite significant backlash for their DRM scheme, Guillemot sees a strong 2010-2011 fiscal year: "We forecast a return to profitable growth in 2010-11 with positive cash flow generation, driven by a games line-up that is more closely tailored to growth segments and based on strong franchises.We also expect to see the first concrete results from our investments in on-line games and services. Lastly, 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-energize the casual games segment. At the same time, we will continue to reorganize our studios and enhance our development teams' productivity."

Sales saw the biggest dip in Europe, with a 49 percent drop year-on-year.

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12 user comments

119.5.2010 0:48

HEHE...serves them right! Maybe if they didn't spend so much on pissing off customers, they would have made a profit!

219.5.2010 1:22

"We forecast a return to profitable growth in 2010-11 with positive cash flow generation, driven by a games line-up that is more closely tailored to growth segments and based on strong franchises"

I forecast that 2010-11 will not be much better than 2009-10.

319.5.2010 2:40

"We forecast a return to profitable growth in 2010-11 with positive cash flow generation, driven by a games line-up that is more closely tailored to growth segments and based on strong franchises"

Does that mean they are removing always-on DRM?

419.5.2010 7:24

So the new DRM reduced piracy 5% and sales 50%? That's what happens if some lousy manager doesn't understand his job. It's common sense that one should only try to reduce piracy if doing so will improve sales. Piracy that doesn't affect sales, equals free publicity.

519.5.2010 9:19
davidike
Inactive

not surprising given how anti consumer this company is at lumbering restrictive DRM onto all their products, but they'll just blame piracy and use ever more restrictive DRM.

619.5.2010 13:39

It's hard to determine the reasons for lack of sales. Assassins Creed sold well even with the DRM. How many younger people who play games really know what DRM even is?

I'm curious to see what impact this DRM move will have on their sales. I just dont think it will be significant.

719.5.2010 19:03

Originally posted by gnovak1:
It's hard to determine the reasons for lack of sales. Assassins Creed sold well even with the DRM. How many younger people who play games really know what DRM even is?

I'm curious to see what impact this DRM move will have on their sales. I just dont think it will be significant.


It's unfortunate, but I think you're partially correct. A lot of people in the main population (probably youths and older adults) might not know too much about what DRM is and will continue to buy products with them regardless.

820.5.2010 0:16

Originally posted by Ragnarok8:
It's unfortunate, but I think you're partially correct. A lot of people in the main population (probably youths and older adults) might not know too much about what DRM is and will continue to buy products with them regardless.
I'm not sure about that...all it takes is one saturday afternoon without internet to teach someone the evils of always-on DRM. If you look at the numbers, the NA region (where internet connections tend to be more reliable and fast than the average for the rest of the world) had higher sales...this is either because the NA region has more PS3s and 360s (no always-on DRM on those), or because the PC users have (so far) been lucky enough to have few issues.

920.5.2010 21:37
kubapolak
Inactive

good

1021.5.2010 12:03
darthya
Inactive

i think their sales decline is directly related proportionate;y tp their implemantation of DRM.

1124.5.2010 15:07
cdxanti
Inactive

So all that money they spent developing that always-on DRM was wasted after the crack was released. Plus the servers that host the DRM. Plus the guys ass they had to pull the piracy numbers out of. Their next DRM is going you to require a FBI agent to stand over you while you play.


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1225.5.2010 4:34

Originally posted by cdxanti:
So all that money they spent developing that always-on DRM was wasted after the crack was released. Plus the servers that host the DRM. Plus the guys ass they had to pull the piracy numbers out of. Their next DRM is going you to require a FBI agent to stand over you while you play.
Don't feel to sorry for them...the drm was probably stolen just like all the other drm schemes.

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