Ubisoft profits down despite increased revenue
Profits drop 37 per cent year-on-year based on tough comps; casual game sales on the rise
Ubisoft has released its full financial results for the fiscal year ended March 31, revealing a 37 per cent drop in profit year-over-year based primarily on challenging comps.
Profits for the year were reported as EUR 68.8 million (USD 95.78 million), down from EUR 109.8 million (USD 152.3 million) in fiscal 2008. According to the company, key releases from fiscal 2008 including Assassin's Creed and Tom Clancy's Rainbow Six Vegas 2 provided tough comps year-over-year.
As previously reported, sales for the publisher were up 14 per cent in fiscal 2009, backed by Tom Clancy's HAWX and both the Petz and Imagine franchises.
"This performance illustrates Ubisoft’s unique business model with cost-competitive development studios and some of the most talented developers in the industry," said CEO Yves Guillemot. "It enables the group to be at the leading edge of innovation and offer superior quality games, while maintaining a high level of profitability."
Ubisoft also revealed that its casual games business accounted for 31.9 per cent of fiscal 2009 sales, up from 25.4 per cent in fiscal 2008. The distribution business also grew, from 2.8 to 7.6 per cent.
"Casual games generate lower gross margins, require less R&D expenditure and have higher marketing costs. The distribution business has low gross margins but requires no R&D expenditure and only limited marketing costs," the company noted.