(AOF) – In the first half of 2023-24, Ubisoft suffered a net loss, group share, of 34.3 million euros compared to a loss of 190.1 million euros, a year earlier. The video game publisher posted an adjusted operating profit (non-IFRS) of 43.5 million euros compared to an operating loss of 139 million euros recorded in the first half of 2022-23. Net bookings, the equivalent of revenue, amounted to 822.4 million euros, up 17.6% (+20.1% at constant exchange rates).
Net bookings for the second quarter amounted to €554.8 million, up 36.6% (+40.1% at constant exchange rates).
In terms of prospects, for the third quarter of 2023-24, the group’s net bookings are expected at around 610 million euros.
For the entire 2023-24 financial year, Ubisoft confirmed its forecasts of strong growth in net bookings and adjusted operating profit of around 400 million euros, without releasing the other major game that it had initially planned to launch during the fourth quarter of the current fiscal year.
The company has decided to launch this other big game during the 2024-25 financial year, “in order to maximize its value creation”.
AOF – LEARN MORE
Key points
-Third independent global video game publisher created in 1986, owning the flagship brands Assassin’s Creed, Just Dance, Watch Dogs, The Division, Far Cry, For Honor, the Crew, Ghost Recon, Rainbow 6, etc.;
– Turnover of €2.1 billion distributed between North America for 51%, Europe for 30% and the rest of the world;
– 5 strengths for the business model: ownership of all the brands, integration of new technological developments into the R&D policy, control of 96% of internal production, increased recurrence of revenue (64% provided by the ” back catalogue”), profitability via digitalization;
– Presidency and general management of the 11-member board provided by Yves Guillemot;
– Solid balance sheet, with €1.8 billion in equity, €331 million in net debt and €1.5 billion in cash.
Challenges
– Revised strategic priorities at the start of 2023:
– construction of more powerful brands and Live services, hence the cessation of the development of 7 projects,
– concentration on fewer titles, hence the depreciation of around €500 million in capitalized R&D, concerning premium and Free-to-Play games,
– industrial reorganization with a net reduction of +€200 million in the non-variable cost base of more than €200 million over the next two years;
– Innovation strategy:
– “Lead associate” for the 45 creative studios,
– cutting-edge technologies (Anvil and Snowdrop for engines, Ubisoft connect and I3D.net for distribution), Web3, Voxel and cloud computing with Scalar…,
– support for start-ups: 6 to 10 incubated each year;
– Environmental strategy driven by the BEGES Report:
– use of renewable energies for French and Canadian data centers,
– sequestration of GHG emissions and reduction of emissions per employee by 8.8% in March 2024 (vs 2019);
– Rapid rise of mobile in net booking (27%), equal to annual turnover.
Challenges
– Activity concentrated in September-January, hence the closing of the accounts at the end of March;
– After the commercial disappointments of the winter, what a public reception to Skull and Bones, the launch of which was once again postponed;
– Deterioration of the social climate, particularly in France;
– Speculation on the capital links of the holding company Guillemot Brothers, founder of Ubisoft, with Tencent, holder of 49.9% of its capital and 5% of its voting rights;
– After an operational loss in the first half, lowering of objectives:
– 3rd quarter 2022-2023: net booking of €725 million,
– financial year 2022-23: +10% decline in sales, operating profit of around €400 million and net loss of €500 million;
– Strong expectations for 2023-24 with the releases of Assassin’s Creed Mirage, Avatar: Frontiers of Pandora, Skull and Bones.
Learn more about the Video Games sector
A French market in slight decline in 2022
The French video game market fell by 1.6% in 2022. It returned to its 2020 level after record results in 2021. According to SELL, the sector’s union, the console segment constitutes 46% of the market’s figure. industry affairs. It fell by 6.6% to stand at almost 2.6 billion euros. This development is explained by supply problems with latest generation consoles. The turnover of computer video games, including machines, accessories and games, increased by 5.8%, to reach 1.5 billion euros. That of mobile gaming stagnated at 1.4 billion euros. FIFA 23, from the American publisher Electronic Arts, which has sold more than 1.7 million copies, was by far the best-sold in France in 2022.