Ubisoft‘s first quarter earnings have revealed a drop in sales compared to the same quarter during the last financial year, something the publisher was expecting. To halt this decline, Ubisoft wants to expand the size of the audience for some of their franchises by expanding them into the free-to-play sector, but this doesn’t mean they will be completely forgetting about premium titles — they have “ambitious plans” for those too.
The 17% drop in sales compared to this time last year was predicted by the publisher due to a number of factors. Not only did they not have a major release within the first free months of the year, the publisher was benefitting from a massive boom in sales last year due to the coronavirus pandemic. During this quarter, more than 94% of sales were from Ubisoft’s back catalogue of titles as many games received significant updates and/or DLC, like Assassin’s Creed Valhalla, Watch Dogs: Legion, Immortals: Fenyx Rising, and Rainbow Six: Siege.
While sales during the next quarter are expected to be similar, Ubisoft feels the second half of the year will be far more profitable. One of the ways they will be doing this is to invest in free-to-play titles; 20% of the publisher’s yearly investment will be in the F2P sector. The Division is one of the franchises to be introduced to a wider audience with The Division Heartland and Tom Clancy’s The Division on mobile. Tom Clancy’s XDefiant has just been announced, and there will also be another unannounced mobile game aiming for the final quarter of the year.
The remaining 80% of the budget will be aimed at premium AAA titles. These come in three categories, the first of which is existing franchises that will soon be expanded. Assassin’s Creed Valhalla will get a second year of content and Far Cry 6 will be released in October. Rainbow Six Siege has recently reached a milestone of 75 million players and Ubisoft hopes Rainbow Six Extraction will appeal to both existing and new players. Beyond Good and Evil 2 also remains in development but is no closer to getting a release window.
The second category is the creation of new IPs. While Riders Republic will be released in October and will be a live service title with plenty of updates, the fate of Skull & Bones is less uncertain. While the game has passed alpha, developer turmoil threatens its future. The final category is games based on major entertainment brands. Avatar: Frontiers of Pandora is a standalone story in the Avatar universe, while Ubisoft Massive continues to work on their Star Wars title.
Ubisoft CEO Yves Guillemot concluded their presentation by explaining the publisher’s plans:
The industry continues to offer bright prospects. With our high-quality brands, technology and exceptional teams, Ubisoft is ideally positioned over the coming years to deliver double-digit topline growth as well as continued profitability progression leading to a material rise in operating income.
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[Source: Ubisoft, Ubisoft Conference Call via Daniel Ahmad on Twitter (1, 2)]
