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Ubisoft’s sales are down significantly, but the company has some bright spots as it works to regroup. The publisher’s net bookings (which is its primary metric for measuring revenue) reached €1.117 billion ($1.226 billion) for the first nine months of the fiscal year. That’s down 17.4% year-over-year. But even as games like Tom Clancy’s Ghost Recon: Breakpoint struggles and drags down Ubisoft’s performance, the company is seeing growth in digital sales.
This is especially true for its PC gaming platform Uplay, which now represents 40% of Ubisoft’s net bookings on PC.
Revenue on Uplay grew 73% in the nine-month period ending December 31 compared to the same time-frame in the previous year. This growth is due to players continuing to show up for ongoing hits like Rainbow Six: Siege and Assassin’s Creed: Odyssey. Ubisoft continued to support both games with regular updates, and that kept the publisher’s monthly active players at a consistent level despite no major new releases in the quarter beyond Just Dance 2020. But Uplay is likely also growing because Ubisoft did not release The Division 2 or Ghost Recon: Breakpoint on Steam (because Epic Games paid Ubisoft to stay off of Valve’s store). The Epic deal provided some upfront cash to ensure Ubisoft could leave Steam without devastating its bottom line.
Following disappointing sales for Breakpoint, Ubisoft delayed several key games. It pushed back Gods & Monsters, Rainbow Six: Quarantine, and Watch Dogs: Legion. This also forced the publisher to revise down its current fiscal-year earnings outlook. Ubisoft is sticking to those revised expectations, and chief executive officer Yves Guillemot says the company is in the process of ensuring that all of its future games are more enticing to fans.
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“The adjustments that we are currently implementing will allow us to pursue [our] strategy going forward by continuing to create high-quality experiences and develop direct relationships with our player communities as well as seizing the numerous growth opportunities the industry has to offer,” said Guillemot.
Uplay grows as players spend more on microtransactions
Guillemot also noted that “player recurring investment” (PRI) is up significantly. PRI includes microtransactions, downloadable content, season passes, and in-game advertising. And this part of Ubisoft’s business jumped 7.4% year-over-year to €474 million ($520 million). PRI also accounted for 42.5 % of Ubisoft’s net booking compared to 32.6% in the previous year.
Here’s Guillemot speaking to Ubisoft’s strengths in his statement to investors:
“Over the past ten years, [Ubisoft] has radically transformed itself and delivered significant return on its investment. We achieved this by overhauling our portfolio, with a strong presence now in multiplayer games, esports, and RPGs. By undertaking a deep-seated digital transformation, with an explosion in player engagement and PRI. And by developing our expertise and infrastructure so as to offer best-in-class live experiences. By ramping up Uplay, which is now our fourth-leading digital platform in terms of sales. By releasing five profitable new brands and owning all of our franchises. And by delivering a powerful comeback for Assassin’s Creed, sustained growth for Far Cry, and incredible success for Rainbow Six Siege – a best seller and one of the greatest esports games of the past five years. As a result, the number of hours played on our PC and console games increased from 2 billion in 2016 to 4.5 billion in 2019.”
And this isn’t just spin from Guillemot. Rainbow Six: Siege and Assassin’s Creed: Odyssey are both backing up his claims.
Rainbow Six: Siege
Siege has 55 million registered players. And it had its best ever December in terms of monthly active players. It also hit a new peak for daily average revenue per player. And microtransaction sales grew even faster for the competitive shooter. Siege is especially popular on PC, and that is contributing to Uplay’s success.
Assassin’s Creed: Odyssey
Odyssey, which debuted in 2018, also continued to deliver strong revenue for Ubisoft. The open-world adventure’s daily active engagement grew 60%. But its in-game spending jump a massive 140% as players purchased digital items and expansions. Assassin’s Creed is hugely popular on console, but it’s likely helping Uplay as well.
Now, Ubisoft will have to see if it can repeat some of that success with games like Gods & Monsters and Watch Dogs: Legion.
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