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Forums - Sales - Ubisoft Reports $117M Loss On Sales Drops, Catalog Discounting

oldschoolfool on 30 November 2009
NJ5 said:

Wow...

Ubisoft was one of the few publishers posting consistent profits in this gen. Now even they are losing money.

This industry truly is going down the crapper.

 


cynical much!!!!!



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jammy2211 on 30 November 2009
NJ5 said:
jammy2211 said:
NJ5 said:
jammy2211 said:

Assassin's Creed 2 is exceeding expectations, why are people doubting it's profitability? Unless Ubisoft expected it to lose money 0_o.

To be clear, my point is that it could not make a great profit depending on how sales end up. Sequels often sell less than their predecessors despite being more frontloaded.

 

On the other hand, Frontloaded games tend to be more profitable as they're selling more copies at a higher price.

 They'd only make a sequel if the original made plenty of money; and if that sequel is exceeding expectations you'd assume it's making more money then the original :/.

Of course it's making more revenue than the original, so far... that's not in question.

 

Thus it's making more profit - people have already explained the 450 number is an inflated figure (No doubt used to 'wow' people into thinking the game would be awesome), and I could easily counter argue the game will have cheaper developement costs then the original, now they have the Engine up and running and more experience with the HD platforms. It's all just speculation though, all we've got to go on is the game selling more copies then the original thus far, at a higher price point on average 0_o.



Procrastinato on 30 November 2009
Avinash_Tyagi said:
Procrastinato said:
There were only 450 people working on AC2 during its beta phase -- the vast majority of them were contracted testers. AC2's team was roughly 70-100 full-timers during most of its development.

OT: Ubisoft should drop Wii development, if it hurts them. Without it, it sounds like they'd be fine. They can come back to it after some other brave publishers have thrown exploratory money at it, and found "gold", as it were.

actually in the longer run, abandoning the Wii would likely result in a greater loss, because HD dev costs are rising, so unless they want to just focus on making a couple of big titles year after year, like AC, and hoping they keep selling enough to beat out dev costs, Wii is their best hope, right now a big flop on the HD consoles could really sink them

Actually... HD devcosts are dropping, thanks to pre-existing engines/middleware, and experienced artists/engineers now being available.



 

NJ5 on 30 November 2009
jammy2211 said:
NJ5 said:
jammy2211 said:
NJ5 said:
jammy2211 said:

Assassin's Creed 2 is exceeding expectations, why are people doubting it's profitability? Unless Ubisoft expected it to lose money 0_o.

To be clear, my point is that it could not make a great profit depending on how sales end up. Sequels often sell less than their predecessors despite being more frontloaded.

 

On the other hand, Frontloaded games tend to be more profitable as they're selling more copies at a higher price.

 They'd only make a sequel if the original made plenty of money; and if that sequel is exceeding expectations you'd assume it's making more money then the original :/.

Of course it's making more revenue than the original, so far... that's not in question.

 

Thus it's making more profit - people have already explained the 450 number is an inflated figure (No doubt used to 'wow' people into thinking the game would be awesome), and I could easily counter argue the game will have cheaper developement costs then the original, now they have the Engine up and running and more experience with the HD platforms. It's all just speculation though, all we've got to go on is the game selling more copies then the original thus far, at a higher price point on average 0_o.

 

That's not how the software business works... all the money is already spent before you start collecting revenue, so you don't make profit until you've covered all the costs.

AC2 is making more revenue... how much of a profit it will make depends on its legs, which are completely unknown at this point.

 



My Mario Kart Wii friend code: 2707-1866-0957

NJ5 on 30 November 2009
Ail said:
NJ5 said:
Train wreck said:
So lets recap.

Ubisoft losing money, HD titles seem to be doing fine (we dont know for sure) but Ubisoft went out of there way to highlight Wii instability as a factor in them losing money.

EA Montreal shifting focus away from Wii titles due to Wii unpredictability.

Maybe its me but I sense a theme brewing...

As famousringo well pointed out, we should add that both developers have mostly made mediocre Wii titles... to put it mildly.

 

Out of 38 third party million sellers on the Wii, Ubisoft has 6.

No other third party has more. They are actually the third party with the most Wii million sellers.

And as Avinash famously said it, if it sells, it's quality !!!!!!!!!

How many of those million sellers were made in the quarter that these statements refer to?

EA Montreal didn't specify which games they were talking about, but Ubisoft only talked about the games of this quarter. I guess I should have been more clear in my post.

 



My Mario Kart Wii friend code: 2707-1866-0957

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Procrastinato on 30 November 2009
NJ5 said:

 

That's not how the software business works... all the money is already spent before you start collecting revenue, so you don't make profit until you've covered all the costs.

AC2 is making more revenue... how much of a profit it will make depends on its legs, which are completely unknown at this point.

 

The professionals at Ubisoft seem to think the game will even exceed their expectations, and given that their expectations were presumably profitable ones, that sounds pretty good.

Kinda sounds like the Wii games, despite their much-acclaimed low budget, didn't meet expectations, and in fact cost Ubisoft enough that they felt the need to attribute losses primarily to those titles.  Either they weren't all that low budget at all, or they were forced into paying retailers to buy them.  I'm going with the former.



 

Avinash_Tyagi on 30 November 2009
Procrastinato said:
Avinash_Tyagi said:
Procrastinato said:
There were only 450 people working on AC2 during its beta phase -- the vast majority of them were contracted testers. AC2's team was roughly 70-100 full-timers during most of its development.

OT: Ubisoft should drop Wii development, if it hurts them. Without it, it sounds like they'd be fine. They can come back to it after some other brave publishers have thrown exploratory money at it, and found "gold", as it were.

actually in the longer run, abandoning the Wii would likely result in a greater loss, because HD dev costs are rising, so unless they want to just focus on making a couple of big titles year after year, like AC, and hoping they keep selling enough to beat out dev costs, Wii is their best hope, right now a big flop on the HD consoles could really sink them

Actually... HD devcosts are dropping, thanks to pre-existing engines/middleware, and experienced artists/engineers now being available.

Then why did MW2 cost almost 50 million to develop?



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)

jammy2211 on 30 November 2009
NJ5 said:
jammy2211 said:
NJ5 said:
jammy2211 said:
NJ5 said:
jammy2211 said:

Assassin's Creed 2 is exceeding expectations, why are people doubting it's profitability? Unless Ubisoft expected it to lose money 0_o.

To be clear, my point is that it could not make a great profit depending on how sales end up. Sequels often sell less than their predecessors despite being more frontloaded.

 

On the other hand, Frontloaded games tend to be more profitable as they're selling more copies at a higher price.

 They'd only make a sequel if the original made plenty of money; and if that sequel is exceeding expectations you'd assume it's making more money then the original :/.

Of course it's making more revenue than the original, so far... that's not in question.

 

Thus it's making more profit - people have already explained the 450 number is an inflated figure (No doubt used to 'wow' people into thinking the game would be awesome), and I could easily counter argue the game will have cheaper developement costs then the original, now they have the Engine up and running and more experience with the HD platforms. It's all just speculation though, all we've got to go on is the game selling more copies then the original thus far, at a higher price point on average 0_o.

 

That's not how the software business works... all the money is already spent before you start collecting revenue, so you don't make profit until you've covered all the costs.

AC2 is making more revenue... how much of a profit it will make depends on its legs, which are completely unknown at this point.

 

Erm, I'm pretty sure it's legs are irrelevent if it sells gangbusters up to new years day. Legs on a HD game normally count less towards profits as that's when it's been reduced and it's profit per copy is thus less, hence why all these publishers are so desperate to make their games frontloaded and base their marketing campaigns on a 1 months blitz.

 Your current reply assumes they spent significiently more developing AC2, which you've no real evidence for (Note, the 450 figure has already been explained as infalted). Although my reasoning is still speculative, the fact Ubisoft say it's exceeding expectations tends to suggest it's making plenty of profit, as I'm pretty sure Ubisoft were expecting a handsome profit without sales exceeding those expected 0_o.



Procrastinato on 30 November 2009
Avinash_Tyagi said:
Procrastinato said:
Avinash_Tyagi said:
Procrastinato said:
There were only 450 people working on AC2 during its beta phase -- the vast majority of them were contracted testers. AC2's team was roughly 70-100 full-timers during most of its development.

OT: Ubisoft should drop Wii development, if it hurts them. Without it, it sounds like they'd be fine. They can come back to it after some other brave publishers have thrown exploratory money at it, and found "gold", as it were.

actually in the longer run, abandoning the Wii would likely result in a greater loss, because HD dev costs are rising, so unless they want to just focus on making a couple of big titles year after year, like AC, and hoping they keep selling enough to beat out dev costs, Wii is their best hope, right now a big flop on the HD consoles could really sink them

Actually... HD devcosts are dropping, thanks to pre-existing engines/middleware, and experienced artists/engineers now being available.

Then why did MW2 cost almost 50 million to develop?

Ask Activision why MW2 does not follow the norm.  Why did Gears 2 only take $10M to develop?



 

NJ5 on 30 November 2009
Procrastinato said:
NJ5 said:

 

That's not how the software business works... all the money is already spent before you start collecting revenue, so you don't make profit until you've covered all the costs.

AC2 is making more revenue... how much of a profit it will make depends on its legs, which are completely unknown at this point.

 

The professionals at Ubisoft seem to think the game will even exceed their expectations, and given that their expectations were presumably profitable ones, that sounds pretty good.

Kinda sounds like the Wii games, despite their much-acclaimed low budget, didn't meet expectations, and in fact cost Ubisoft enough that they felt the need to attribute losses primarily to those titles.  Either they weren't all that low budget at all, or they were forced into paying retailers to buy them.  I'm going with the former.

If the Wii games they're complaining about are the ones that famousringo listed, I don't know who Ubisoft is trying to blame here...

 



My Mario Kart Wii friend code: 2707-1866-0957