Ubisoft Experiences Slight Decline in First-Half Sales, Yet Surpasses Q2 Projections

Ubisoft has released its first-half sales report, revealing a slight decline in revenue, yet the company has surpassed its Q2 guidance thanks to robust back-catalog sales. Key highlights include: - Revenue: €731 million, representing a 3% year-over-year decrease - Net bookings: €699 million, also down 3% year-over-year - Operating loss: €215 million, a significant drop from the €25.9 million operating income in the previous year's first half. Despite the revenue decline and operating losses, Ubisoft remains optimistic due to several factors. The single-digit revenue decrease was better than expected, with the company initially projecting second-quarter net bookings of approximately €270 million but ultimately reporting €406 million, a 3.3% year-over-year increase. According to Ubisoft CFO Frédérick Duguet, "The first-half results reflect increased R&D depreciation, including the previously announced cancelled projects, as we shift our focus towards our most significant opportunities." Assassin's Creed and Rainbow Six Siege demonstrated strong performances, driven by back-catalog sales. Assassin's Creed: Valhalla attracted over 20 million unique players, while Rainbow Six Siege surpassed 85 million unique players, with net bookings rising 18% year-over-year. Despite incurring operating losses in the first half, Ubisoft reaffirmed its guidance of €400 million in operating income for the full year on a non-IFRS basis. The company's first-half non-IFRS operating loss was €139 million. The operating income guidance partially relies on the recently launched Mario + Rabbids: Sparks of Hope, which is considered the biggest release of the publisher's fiscal year. During a post-earnings call, executives addressed concerns about the game's physical sales, which are reportedly tracking behind the original Mario + Rabbids title. However, Duguet downplayed these concerns, stating that the company is "satisfied" with the game's early sales, particularly given that only 20% of the total marketing budget has been spent, with plans to target mainstream audiences in the coming weeks and months. Additionally, the game has a higher share of digital purchases compared to its predecessor.