Welcome to another edition of Question Block. As always, if you have questions you would like to see in a future edition, post them in the Comments section below or email rdonaldson@vfs.com. And now, on with our show…
I recently read that Ubisoft has seen revenue growth in FY13 because of its core games like Assassin’s Creed, Just Dance, and Far Cry 3, and less growth in its casual games. Does this mean they will focus less on developing casual games? They are also depending on the success of new consoles. How much will the success or failure of the new consoles affect the company?
We have seen something of a platform transition in the casual space in the past year or two, as companies shift away from Facebook in favor of mobile devices. This has caused a bit of a downturn in revenue for many casual developers as they wind down their social titles, and Ubisoft’s casual arm is no exception. Keep in mind that Ubisoft makes a lot of casual games for platforms like Wii and DS as well, and with slow sales of the Wii U and 3DS, they aren’t reaching the casual install bases they found on Nintendo’s last generation of systems. Despite the slowdown, it’s almost certain that Ubisoft will continue to support casual to some extent, so we can expect that its performance in that space will generally follow the market. Whether that means casual revenue will be at higher or lower levels than before remains to be seen.
Ubisoft has tended to have a very diverse portfolio of games, and some of the titles that we as gamers might dismiss are actually some of their top sellers. True, Assassin’s Creed III shipped 12.5 million units to retail to date, but Just Dance 4 has shipped 8.5 million! (Though keep in mind that shipping to retail doesn’t necessarily mean impressive sell-through numbers.) This pervasive strategy helps the company weather transitions rather well, since it means it has products spread across many different platforms. That said, certain consoles skew towards certain demographics, so a slowdown in Nintendo console sales will lead to a downturn in Ubisoft’s casual revenue; poor sales of Sony or Microsoft consoles would have a bigger impact on Ubisoft’s hardcore franchises.
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