Ubisoft closes a year of expansion and profits for game business

Ubisoft reported fiscal year results with good sales growth and a decent profit despite the recession. For the year ended March 31, the French game publisher reported sales of $1.47 billion, up 18.4 percent from $1.3 billion a year earlier.

Net income was $95.6 million, down 37 percent from $152 million a year earlier. The Paris-based company reported the strong growth in the face of economic headwinds and its own aggressive expansion. One of the strongest growth areas was casual games, such as games for girls on the Nintendo DS. The casual game category was 32 percent of sales and it grew 43 percent during the year. Profits were down in part because margins on casual games are lower than on hardcore games.

The performance underscores just how well run this company is. Even as rivals such as Electronic Arts, Take-Two Interactive, and THQ all lost money.

Meanwhile, Yves Guillemot, chief executive, said in a conference call that the company hired 1,300 people, acquire five studios and started four internal studios during the year. Given that 60 other layoffs took place during the past year in the game industry, the financial performance amid expansion is commendable.

Ubisoft has a big stable of game properties. One of its big sellers in the year was Tom Clancy’s Rainbow Six Vegas 2. On the Nintendo Wii, the Shaun White snowboarding game sold 2.8 million copies. In the coming year, the company is expecting to launch a sequel to its smash hit Assassin’s Creed. And this fall, Ubisoft is launching a game based on James Cameron’s highly anticipated movie, Avatar.

While the console game industry has been flat this year, Guillemot said that he expects the industry to grow in the second half of the year because of all of the blockbuster games coming. Ubisoft closed the year with $214 million in cash. Ubisoft said its outlook for its fiscal performance was unchanged.

At the end of the conference call, Guillemot made an interesting prediction about Apple’s growing investment in games. He noted the iPhone’s growth and said, “We don’t think they will stop there.”