Ubisoft 2007-08 sales up 43%

Ubisoft has reported Q4 sales of EUR 217 million (USD 340 million; GBP 172 million), up 20.3 per cent from the same period of the prior fiscal year at constant exchange rates.

Fourth quarter sales were 31.5 per cent higher than the company's initial guidance issued on January 23, 2008. This strong showing was driven by better-than-expected performances from Tom Clancy's Rainbow Six Vegas 2, the Games for Everyone brands and Assassin's Creed.

For the full fiscal 2007-08 year, sales were EUR 298 million, up 42.9 per cent at constant exchange rates (USD 466 million; GBP 236.6 million).

Ubisoft's CEO Yves Guillemot said that 2007-08 was underpinned by three strategic achievements: continued strengthening of existing franchises, the sharp ramp-up of its casual range and a steady output of new releases.

"These strategic focuses will once again be the key to our success in 2008 which is set to be another record year for the industry with growth expected to reach at least 15 per cent," Guillemot said.

"Ubisoft's games line-up is particularly strong, with no fewer than seven existing franchises, five new releases and new brands in the casual segment."

During the first three months of the calendar year, Ubisoft posted growth of 38 per cent in the US and 43 per cent in Europe - both rates were faster than the growth of the markets as a whole.

In terms of market share, during the first three months of 2008 Ubisoft was ranked the #3 independent publisher in the US, #2 in Europe, #2 in France, #3 in the UK and #2 in Germany.

The company expects sales for the first quarter of 2008-09 to come in at around EUR 154 million (USD 241 million; GBP 122 million) - a 15 per cent increase on the comparable prior-year period - with the release of Haze for the PS3, Assassin's Creed and Tom Clancy's Rainbow Six Vegas 2 for PC, and new casual games for the DS and Wii.

Ubisoft is maintaining the approximately EUR 1 billion (USD 1.56 billion; GBP 794.6 million) sales target for 2008-09 that it announced on January 23. At the same time, it is raising its guidance for current operating income before stock options to at least 12 per cent of sales - up from the previous estimate of at least 11 per cent.

In a conference call to investors, Guillemot responded to Nintendo's suggestion that DS sales will slow in 2008, saying that he believes the DS will sell more than what Nintendo expects.

The company also noted the lower development costs associated with development for Nintendo platforms, saying that it spent EUR 500,000 to 1 million on DS game development and EUR 5 to 6 million - compared to 12 to 18 million for development on the Xbox 360, PC and PlayStation 3.

Increasing Ubisoft's DS market share during the next fiscal year is a goal of the company that Guillemot thinks will happen.

"We think that we have good quality products for the year to come and we will be able to generate good growth."

Guillemot refused to comment on any specific mergers or acquisitions, saying only that the company will take advantage of the weak dollar to increase the size of the company by hiring more employees and buying new studios and new IP.

"If there are great opportunities, we'll take them," Guillemot said. "But we can't say more about that."