PS4 Dominates Ubisoft’s Sales Once More in Q2 FY2016-17; Xbox One and PC Follow

on November 3, 2016 12:44 PM

Today Ubisoft released its quarterly financial results for the second quarter and first half of fiscal year 2016-2017, ended on September 30th. Like in past quarters, PS4 versions are still on top of the company’s software sales. Xbox One and PC following.

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Interestingly, Xbox One versions of Ubisoft’s games overtook PC version compared to the first quarter of the current fiscal year, where PS4, Xbox One and PC were at 31%, 23% and 26% respectively.

The company also released a breakdown of sales by region:

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The press release accompanying the announcement included a detailed explanation of the quarterly results, including the mention that The CrewThe Division and Rainbow Six Siege both have over ten million registered users:

Sales for the first half of 2016-17 came to €281.4 million, up 35.7% (or 37.1% at constant exchange rates) compared with the €207.3 million recorded for first-half 2015-16.

Sales in the second quarter of 2016-17 totaled €142.2 million versus €110.7 million in the corresponding prior-year period, representing an increase of 28.5% (or 28.8% at constant exchange rates). This second-quarter showing was higher than the target of approximately €100 million issued when Ubisoft released its sales figures for the first quarter of 2016-17.

Ubisoft’s sales performance in first-half 2016-17 reflects:

  • The continued success of the multiplayer strategy aimed at increasing player engagement:
    • The Crew, Tom Clancy’s The Division and Tom Clancy’s Rainbow Six Siege each have over 10 million registered players.
    • A further increase in the number of monthly active users (MAUs), up 43.9% year on year.
    • Higher recurring player investment, with a 132.1% year-on-year rise to €95.4 million (included in digital revenues).
  • Very sharp growth in digital revenues, up 102.6% to €202.6 million and representing 72.0% of total sales versus 48.3% in first-half 2015-16.
  • A 45.5% increase in back-catalog sales to €256.4 million.

Gross margin rose to 80.5% of sales at €226.4 million in the first half of 2016-17 from 74.4% (€154.3 million) for the first six months of 2015-16. This strong growth primarily reflects the positive impact of the digital segment. Ubisoft reported a non-IFRS operating loss of €61.8 million versus €107.8 million in first-half 2015-16, corresponding to a €46.0 million improvement on the back of a €74.1 million increase in sales.

Basically, while the company reported a loss, the situation for the first half of the fiscal year was an improvement compared to the first half of the past fiscal year.

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A statement by CEO Yves Guillemot also gives more color on the current situation of the publisher.

“Our excellent performance in the second quarter as well as the sharp improvement in our profitability during the first six months of the fiscal year are proof that we have gotten both our digital strategy and our approach to multiplayer games right. The Crew, The Division and Rainbow Six Siege each have more than 10 million registered players, demonstrating that we are effectively executing our business development plan and moving towards an ever-more recurring model. All of our actions and initiatives are aimed at achieving this objective. We are creating powerful franchises that offer long-term visibility. Our multi-studios organization enables us to have regular games releases. And the Live experiences for our consoles and PC games, including our investments in eSports, encourage long-term player engagement. As a result, Ubisoft is well positioned to achieve very high value creation over the coming years.”

“Thanks to the more favorable trends seen in the first six months of 2016-17, we now expect digital revenues to represent approximately 40% of total sales for the full fiscal year and we have revised upwards our non-IFRS operating income target.”

We also get the outlook for the current quarter (ending on December 31st) and the full fiscal year (ending on March 31st, 2017).

Sales for the third quarter of 2016-17

The third quarter of 2016-17 will see the following main releases:

  • Watch_Dogs 2 for PC, Playstation 4 and XboxOne
  • Steep for PC, Playstation 4 and XboxOne
  • Just Dance 2017 for PC, Playstation 4, XboxOne, Wii, WiiU, Xbox360 and PS3
  • The following expansions: Tom Clancy’s The Division Survival, Tom Clancy’s Rainbow Six Siege Operation Red Crow and The Crew Calling All Units, for PC, Playstation 4 and XboxOne
  • Eagle Flight for Oculus Rift PC, PS VR Playstation 4, HTC VIVE PC

Ubisoft expects third-quarter 2016-17 sales to amount to around €560 million, stable year-on-year.

Full-year 2016-17

“The structural factors that drove the strong increase in profitability in the first half – namely very robust momentum for the digital segment and back-catalog combined with tight costs control – are expected to continue in the second half of the fiscal year. Consequently the Company has revised upwards its full-year target for non-IFRS operating income, which is now expected to come in at between €230 million and €250 million, compared with the previouslyannounced target of approximately €230 million.

At the same time, the full-year sales target has been revised downwards in order to factor in more conservative sales projections for the second half. Sales are now expected to amount to between €1,610 million and €1,670 million versus the previously-announced target of approximately €1,700 million.”

Last but not least, we get a breakdown of the upcoming releases for this quarter (ending on December 31st).

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 /  Executive News Editor
Hailing from sunny (not as much as people think) Italy and long standing gamer since the age of Mattel Intellivision and Sinclair ZX Spectrum. Definitely a multi-platform gamer, he still holds the old dear PC nearest to his heart, while not disregarding any console on the market. RPGs (of any nationality) and MMORPGs are his daily bread, but he enjoys almost every other genre, prominently racing simulators, action and sandbox games. He is also one of the few surviving fans of the flight simulator genre on Earth.