Ubisoft Posts Q3 Revenue, Lowers Yearly Estimate

French-headquartered Ubisoft, one of the largest publishers in video games, has posted its results for the third quarter of its 2005-2006 fiscal year. Sales for the quarter, which ended on December 31, 2005, reached 250 million euros ($305.3 million USD), which was a 35% increase over the same period in the 2004-2005 fiscal year. The quarter brought the yearly revenues through the first nine months up to 403 million euros ($492.2 million USD), an increase of 29% - however, Ubisoft is not currently required to reveal its specific profits for either the third quarter or year to date under French accounting rules, meaning that its true financial performance is somewhat masked. Though Ubisoft's improved performance to date, caused by significant sales of King Kong and Prince of Persia: The Two Towers, brought the company's performance in line with earlier guidance, Ubisoft elected to lower its expectations for the full year. Previously, full-year revenue was expected to reach 600 million euros ($732.6 million USD), but fears of more fallout from the console transition period, low reorders for King Kong, which has already shipped 4 million units, and a move for Splinter Cell: Rogue Agent out of the fourth quarter led Ubisoft to scale back estimates to 530 million euros ($647 million USD). However, the company still highlighted its U.S. market performance, with its overall market share improving to 4.5% in 2005 over the 2005 holiday season as the 5th largest independent publisher, compared with 3.5% in 2004. Ubisoft also estimated that it was the 2nd largest independent publisher in France and Germany, 3rd largest independent publisher in Italy, and 4th largest independent publisher in the UK and Australia, and overall, the company ranks itself as the 4th largest independent publisher worldwide in 2005. "We are disappointed that our full year results should come below our initial guidance," said Ubisoft CEO Yves Guillemot. "Nevertheless, we are very proud that Ubisoft has clearly gained ground in 2005, in a challenging environment due to the arrival of next-generation home consoles. These gains were achieved while making major investments in these new platforms in order to leverage the Group’s strengths for future profitable growth." Guillemot continues: "The market transition will continue in the short term. However, with its portfolio of stellar brands and widely recognized development talents, Ubisoft is uniquely positioned to take advantage of the long term positive prospects of the video game industry."