Ubisoft Prioritizes Predictability Following Target Downgrade

Ubisoft has released its financial report for the quarter ending December 31, showcasing a moderate increase in sales but a decline in bookings. Key figures include: - Sales: €1.5 billion, up 6.1% year-over-year - Net bookings: €1.43 billion, down 2.6% year-over-year - Back-catalog net bookings: €249 million, down 27% year-over-year The company had previously warned investors of disappointing results, citing underperforming holiday titles such as Mario + Rabbids: Sparks of Hope and Just Dance 2023, and announced a cost-cutting campaign. While new releases underperformed, it was the sales of older titles that negatively impacted bookings, with back-catalog net bookings decreasing by 27% year-over-year. However, the Assassin's Creed brand saw a 30% increase in active players over the first nine months of the fiscal year, reaching a new record. Rainbow Six: Siege also had a strong quarter, with December posting record daily average revenue per user as it completed its seventh year of release. Ubisoft CEO Yves Guillemot emphasized the company's focus on achieving more predictable results, stating, "We are committed to enhancing our efficiency and execution through a more agile organization adapted to new market conditions, with a strong focus on initiatives to improve predictability across our productions and through our cost-reduction efforts." The company has spent the past year and a half replicating the production framework used by the Montreal and Quebec City teams that produced the last three Assassin's Creed games in its other franchises to improve predictability. In a post-earnings investor call, Guillemot announced that the number of games in development at Ubisoft over the next two years will decrease significantly, allowing for more focus on upcoming games. Although the number of games in development will decrease, many of these games will have post-launch content and still require a certain number of employees to produce. The publisher confirmed its revised full-year 2022-23 guidance and its full-year 2023-24 non-IFRS operating income target of approximately €400 million.