Ubisoft Q1: Strong results as Switch appears to pin back PS4 sales

Ubisoft’s Q1 results are in, with a huge uptick year-on-year, as expected. With the ongoing sales of Assassin’s Creed: Origins and Far Cry 5 making early 2018 a far stronger period do the company than even last year’s Ghost Recon: Wildlands.

Net bookings were up 88.8 per cent to €381.5m, which easily beat Ubisoft’s own target of €350. In a boom quarter though, digital bookings didn’t quite keep pace with the total, rising 76.7 per cent to €287m. That amounts to 75.2 per cent of total net bookings versus 80.4 per cent in the same quarter year-on-year.

One interesting point was that PlayStation 4’s share of Ubisoft’s net bookings had slipped by six points from 44 per cent last year to 38 per cent this year, while Xbox remained static on 22 per cent. Switch looks to be the main cause, with the console leaping from one per cent to five per cent as it becomes established.

It’s still early days, but as predicted by some, it looks like Switch is a bigger threat to PlayStation than Xbox, although the Sony console still dominates the market. PC also grew from 21 per cent to 24 per cent, while mobile held steady.

Big publishers are keen to push ongoing sales by players, as these represent a steadier income stream than big, potentially hit or miss, releases. Though obviously in the longer-term it’s hard to have one without the other unless (until?) the business model changes radically to a full subscription and microtransaction model.

PRI (Player Recurring Investment) was up by 51.5 per cent to to €125.9 million. Such sales include digital items, DLC, season passes, subscriptions and advertising, and growths such as this should be sustainable going forward.

Back-catalog net bookings were also up 74.7% to €332.6 million, as the well-established current console generation, and the growing acceptance of digital purchases with consumers, lets the company monetise existing titles.

Yves Guillemot, co-founder and CEO, stated “We had a record first quarter, which exceeded our expectations. This performance was fuelled by steady growth for our back-catalog and an excellent momentum for PRI, once again confirming the increasingly recurring profile of our business and the ever-greater success of our digital transformation.

Our teams are continuing to deliver on our strategic plan of ramping up our franchises. Assassin’s Creed Odyssey and The Division 2 were very well received at E3, confirming their full potential in a highly competitive environment. Our new creation, Skull & Bones, also made a very good impression due to its innovative gameplay combining naval battles with a multi-player experience.

Thanks to its numerous growth drivers, brisk digital trajectory and close-knit relations with its gamer communities, as well as the fact that it directly owns its brands, Ubisoft is ideally positioned to meet its targets for full-year 2018-19 and continue to grow and increase its profitability over the long term.”