Ubisoft have published their annual earnings for the year ended March 31. For the third time in four years, they have made record sales figures and delayed the open world pirate simulator, Skull & Bones to the next fiscal year.
Ubisoft announced that their sales increased by 39% in the last fiscal year to a total of €2.22 billion. This is similar to their net bookings which increased by 46% to €2.24 billion. This is a major improvement compared to their last fiscal year. This year they made a consolidated net income of €105.2 million compared to a net loss of €124 million last year.
Details from the report
While the report states that Ubisoft is still committed to the release of several paid AAA games, Far Cry 6, Rainbow Six Quarantine and Riders Republic are all coming out this fiscal year, they are planning to shift their focus towards the free-to-play model.
Last week they announced The Division: Heartland, a free-to-play chapter of the loot-shooter game series developed by the company. Also in The Division universe, they are planning to release a new Division 2 update with brand new content coming later this calendar year. They also have plans to release a Division mobile game that will be released beyond fiscal 2021-22. Finally, in the Division universe, they are working on a Netflix movie starring Jessica Chastain and Jake Gyllenhaal.
They are also committed to the future of Rainbow Six esports, on March 26th Ubisoft announced its best performance to date for Tom Clancy’s Rainbow Six Esports regional leagues, with record-breaking peak concurrent viewers and average minute audience results in each of its four regional leagues. With their renewed focus on free-to-play games and audience retention, it looks like they may invest more heavily in esports events.
Comments from the company
Yves Guillemot, Co-Founder and Chief Executive Officer of Ubisoft spoke in their recent earnings release:
“Our teams demonstrated incredible resilience during a challenging year, delivering amazing games and experiences. We also relied on a deep and diversified back-catalogue which, again, outperformed our expectations and represented for the third consecutive year more than 50% of our total net bookings, progressively cementing the recurring profile of our business. Our assets have never been so strong. Alongside these successes, we have pursued the transformation of our organization that we had initiated 18 months ago to ensure Ubisoft is positioned to meaningfully grow audience and recurring revenues over the coming years. We have also implemented profound changes to ensure the continued development of an inclusive working environment where our talents can thrive and deliver the game experiences that players will love and share.”
Frédérick Duguet, Chief Financial Officer, said:
“Ubisoft delivered a record year at the top and bottom lines thanks to an underlying performance that was significantly stronger than expected. This reflects the progress achieved in the diversification and recurrence of our revenues. We can rely on a deep portfolio of owned IPs, from our tentpole franchises, Rainbow Six, Assassin’s Creed, The Division, Far Cry, Just Dance, Ghost Recon and Watch Dogs to fan-favourite brands like For Honor, The Crew, Brawlhalla and Mario + Rabbids. Our FY22 line-up will be the most diversified we have ever had, with ambitious post-launch plans as well as premium and F2P new releases. Our financial targets reflect these growth initiatives which are intended to generate significant value over the long term.”
The future for Ubisoft
This sort of news does not come as a surprise to anyone who has been following the state of the gaming industry. For a long time, free-to-play gaming was relegated to mobile app stores, games like Candy Crush that forced players to fork over their cash for better rewards and more retries. Now, even huge developers like Bungie, Ubisoft, and Infinity Ward have drank the free-to-play Kool-Aid.
This may not be the worst thing for the company, they will still release a few AAA games each year but it seems like the majority of their profits will come from free-to-play games. Look at the best esports betting sites, how many of the biggest esports games have transitioned to a free-to-play model?