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French video game giant Ubisoft reported earnings for its first fiscal quarter ended June 30, with revenue shrinking 10% from $359.6 million a year ago to $324.4 million.
Bookings for the quarter were down 10% from $332.3 million a year ago to $299 million in the most recent quarter. Ubisoft chief financial officer Frédérick Duguet said in a statement that the performance was slightly better than expected thanks to outperformance from Rainbow Six Siege and Assassin’s Creed, the company’s perennial brands.
For the full fiscal year ending March 31, 2023, Ubisoft expects operating income of $414 million. Ubisoft’s stock is down slightly at 41.66 euros per share, and the company’s valuation is $5.2 billion.
Duguet noted that the quarter was active with gameplay reveals of Mario Rabbids: Sparks of Hope and Skull and Bones. And he said players’ feedback for the reveal of The Division: Resurgence and for the ongoing tests of Rainbow Six Mobile, The Division Heartland and XDefiant have been supportive.
“As our teams are intensely focused on delivering memorable experiences to players across platforms, business models and geographies, we continue to work on the richest pipeline in the company’s history,” said Yves Guillemot, Ubisoft CEO, in a statement. “We have an unprecedented opportunity to leverage the strength of our IPs to a significantly wider audience. The new high-value mobile partnership for one of our brands reflects the powerful appeal of our brands for the fast-growing triple-A mobile segment. It also provides our teams with more time to fully realize their creative vision and deliver high-quality experiences for our fans, while at the same time increasing our visibility for both 2022-23 and 2023-24.”
Guillemot added, “As we concentrate on unlocking the value of these initiatives, we are simultaneously adapting our organization to current economic uncertainties through cost optimization. We are also working hard to design the most efficient working conditions to ensure both flexibility for our teams as well as strong productivity and high-quality content. We are confident that we are entering a multi-year cycle of significant topline and operating income growth.”
In its seventh year, Tom Clancy’s Rainbow Six Siege performed ahead of expectations. The team has been hard at work to deliver very ambitious Year 7 content. The Assassin’s Creed brand also performed ahead of expectations on the back of a strong quarter from Odyssey, Origins and Valhalla.
The company said Roller Champions has been well received by players for its fun and dynamic gameplay. On both retention and revenue metrics, Roller Champions is tracking ahead of Hyper Scape, which was a promising battle royale that failed.
But while Ubisoft touted the Mario+Rabbids (October 20) and Skully and Bones (coming November 8) reveals, it also said it was delaying Avatar into the next fiscal year and it was also delaying a smaller unannounced premium game. For the second fiscal quarter ending September 30, Ubisoft expects bookings of $274 million.
In an analyst call, Duguet said Avatar will be one of the most beautiful video game worlds ever created. Guillemot said, “We think the Avatar brand can be a video game brand. We are treating that game like a video game brand.”
In an analyst call, Guillemot said the company is entering a multi-year period of expected growth. The company said it expects to reduce its fiscal year 2023 expenses to fiscal 2022 levels by fiscal year 2024. And it will do that by employment headcount “stabilization.” It will stabilize headcount starting by the end of this fiscal year.
It ended development on titles such as a Splinter Cell VR title, Ghost Recon Frontline, and two unannounced titles.