Ubisoft Full-Year 2009-10 Results

Key insights

7 takeaways

01
Ubisoft reported an 18% decline in total sales to €871 million for fiscal year 2009-10, resulting in a net loss of €44 million.See it on page 1
02
The company’s current operating loss of €60 million was driven by a 50% drop in back-catalog sales and significant inventory issues within the Nintendo DS segment.See it on page 2
03
Key franchise performance provided a buffer, with Assassin’s Creed II selling nearly 9 million units and Just Dance moving 3 million units on the Wii.See it on page 2
04
Geographically, the company’s revenue was concentrated in Europe (49%) and North America (43%).See it on page 6
05
Strategic expansion included the opening of a new studio in Toronto and the acquisition of Nadeo to strengthen online gaming capabilities.See it on page 4
06
Despite the annual loss, Ubisoft ended the fiscal year with a net cash position of €41 million.See it on page 3
07
Management projects a return to profitability in fiscal 2010-11, targeting first-quarter sales of approximately €145 million supported by the Uplay portal.See it on page 4

Summary

Ubisoft’s fiscal year 2009-10 results reflect a challenging period for the global video game industry, which contracted by nearly 10% due to the broader economic crisis. During this fiscal year, Ubisoft experienced an 18% decline in total sales, falling to €871 million from €1.06 billion in the previous year. This downturn, compounded by significant write-downs on both launched and upcoming titles, resulted in a current operating loss of €60 million and a net loss of €44 million.

The company’s financial performance was heavily impacted by a sharp reduction in back-catalog sales, which dropped from €220 million to €110 million, alongside excess inventory issues, particularly within the Nintendo DS segment. Despite these headwinds, the company saw strong performance from key franchises, notably Assassin’s Creed II, which sold nearly 9 million units, and Just Dance, which moved 3 million units on the Wii platform. By the end of the fiscal year, Ubisoft maintained a net cash position of €41 million.

Geographically, the company maintained a significant presence, with Europe accounting for 49% of sales and North America for 43%. Strategic developments during the year included the opening of a new studio in Toronto and the acquisition of Nadeo to bolster online gaming capabilities. Looking ahead, management anticipates a return to profitable growth in fiscal 2010-11, driven by a refreshed product lineup, investments in online services through the Uplay portal, and the integration of new console technologies. The company expects to see immediate improvements in the first quarter of the new fiscal year, with projected sales of approximately €145 million.