Ubisoft Posts Higher First Half Sales, Declining Losses

Major international game publisher Ubisoft has announced its financial results for the first half of its 2006-07 fiscal year ended September 30, during which the company reported increased sales, in the face of somewhat improved operating losses for the period. Operating losses for the six month period were €35.3 million ($47 million), a 20 percent improvement over the €43.7 million ($58.1 million) loss posted during the same period last year. The company cited declining sales, marketing and general and administrative expenses as the reason for the increase. However, despite the continued loss, the company posted a 13 percent climb in revenue for the half equating to €172.1 million ($228.8 million). Ubisoft also noted that it experienced an increase in expenses relating to research and development for the period of €71.4 million ($95 million), up from €71.4 million ($80.1 million) recorded during the same time last year. Looking back at the third quarter specifically, Ubisoft noted that its Xbox 360 release of Tom Clancy’s Splinter Cell Double Agent ranked as the top selling title in the United States in October, generating an impressive growth of 113 percent in that market for the company during that month. In addition, the company's Wii-exclusive Red Steel, which launched alongside the new platform in both North America and Japan, has also performed well according to Ubisoft officials, ranking second best in software sales within North America. Ubisoft officials also commented that the Wii version of Rayman Raving Rabbids, also a launch title for Nintendo's new console, ranked among the five best selling titles since the Wii's debut in the United States. As a result, Ubisoft now plans to strengthen its support of the Wii going forward. "The improvement in our results for the first half of the fiscal year reflects both a very good business performance and tight control of marketing expenditures,” commented Ubisoft CEO Yves Guillemot. “The third quarter of 2006-07 is off to a good start, with Red Steel and Rayman in the top five sales on the launch of the Wii, and Tom Clancy’s Splinter Cell and Tom Clancy’s Rainbow Six returning to the front ranks. He added: “These positive factors have enabled us to raise our minimum growth target for 2006-07.” Ubisoft is maintaining its targeted financial expectations for 2007-08, with anticipated revenue growth of about 25 percent.