Slow pre-orders for Watch Dogs 2 mean mixed news in Ubisoft quarterly results

"This guy hasn't pre-ordered!"

Ubisoft’s revenues are up and they’ve beaten their guidance for the first half of 2017 thanks to strong sales of old games, but shaky pre-orders for Watch Dogs 2 and a dearth of other major releases are informing a cautious outlook for the rest of the year.

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Ostensibly, Ubisoft has had a good year so far, with revenues up 35.7% year-on-year at €281.4 million ($312.2 million US), digital revenues up sharply – a trend that EA and Activision Blizzard have also experienced – and monthly active users up 43.9%.

Yves Guillemot, co-founder and CEO of Ubisoft, referenced The Crew, The Division and Rainbow Six Siege in his statement, saying each have more than ten million registered players. He said this validated Ubisoft’s strategy of “creating powerful franchises that offer long-term visibility.”

However, there are reasons why these games might not represent the strongest portfolio. The Crew is ageing, having launched at the end of 2014; Rainbow Six Siege is also a year old and nearing the end of its planned DLC schedule; and The Division has been plagued with cheaters, glitches and imbalances (though players are responding well to its recent 1.4 update).

Compounding the problem, Guillemot admitted in a call to investors that Watch Dogs 2 – Ubisoft’s only major Triple A release this holiday season – has fallen short of pre-order expectations. Accordingly, Ubisoft revised its full-year guidance down from $1.89 billion to between $1.79 and $1.86 billion, “to factor in more conservative sales projections for the second half” of its fiscal year.

Guillemot tried to mollify concerns over this, pointing to widespread disappointment about the original Watch Dogs and arguing that gamers are merely being cautious about the sequel. He expects that sales will pick up sharply when reviews turn out to be positive. (A reasonable supposition, though as I lack his bias, I’d substitute “if” for “when”.)

Otherwise, Ubisoft’s fortunes for the end of the year are dependent on snowsports sim Steep and the Assassin’s Creed movie.

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