Amidst solid annual earnings last April, French game publisher Ubisoft waved a caution flag and warned its year over year sales results would likely slip for the quarter ended June 30th . Maybe they should have grabbed a megaphone to broadcast the revenue warning too.
Today, the company reported first quarter sales 12.6% below guidance. (release (PDF))
For Q1 2009-10, Ubisoft’s sales came in at EUR 83m, down 50.6%.
The company blamed a combination of market conditions and surprise sales trends for the result. Casual games for the DS were among those singled out
“We are currently experiencing a very sharp slowdown in our sales for Nintendo DS as well as sales of back catalog titles, in the context of a market that is tougher than we anticipated,” said CEO Yves Guillemot.
In consideration of the climate, the company is revising its full year ahead targets downward. Sales are now expected to come in at EUR 1.04b, with operating income before stock-based compensation representing at least 7% of sales. The company had previously guided for sales of approximately EUR1.1 with Op Income at least 11% of sales. The company is targeting sales growth of 23% for the second half.
Sales for the second quarter were also adjusted downward. The company is guiding for sales of around EUR 80m, equal to a 54% year over year decline. The company had previously forecast EUR 130m.
In addition to the weak earnings news, Ubisoft also revised its year-ahead product pipeline. Splinter Cell Conviction and Red Steel 2, previously scheduled for the third quarter, have been bumped to the fourth. Ghost Recon and I am Alive which were previously scheduled for Q4 have been pushed to the next fiscal year. (the company’s Q2 release schedule is reprinted below).
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