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Ubisoft Posts Lower Profit, Increased Revenue For Full Year

Paris-based Rayman house Ubisoft has posted annual sales of €1.06 billion ($1.47 billion), up 14 percent for the year ended March 31, while profit dropped 37 percent to €68.8 million ($95.78 million) year-on-year, as DS game price pressure hits.
Paris-based Rayman house Ubisoft has posted profits of €68.8 million ($95.78 million) for the fiscal year ended March 31, a 37 percent year-on-year drop, as the company's lower-margin casual and distribution businesses gained ground. However, as previously reported, Ubisoft recorded a 14 percent year-on-year rise in sales for the fiscal year, thanks in part to an increase in the company’s casual game and distribution businesses. Sales were €1.06 billion ($1.47 billion), up from €928.3 million ($1.3 billion) for the prior year, Ubisoft said. For the year, casual game sales contributed 31.9 percent of sales versus 25.4 percent a year ago. The distribution business contributed 7.6 percent of sales compared with 2.8 percent. The company noted of the shift towards casual and distribution: "Casual games generate lower gross margins, require less R&D expenditure and have higher marketing costs. The distribution business has low gross margins but requires no R&D expenditure and only limited marketing costs." The publisher also said it stood against a tough comparison to last fiscal year, which saw the releases of top-selling games Assassin’s Creed and Rainbow 6 Vegas 2. Ubisoft noted that price pressure on Nintendo DS titles also negatively impacted gross profits during the second half of the year. CEO Yves Guillemot said of the results, “This performance illustrates Ubisoft’s unique business model with cost-competitive development studios and some of the most talented developers in the industry. It enables the company to be at the leading edge of innovation and offer superior quality games, while maintaining a high level of profitability." Ubisoft confirmed its 2009-2010 sales outlook of around €95 million, and full year sales of €1.1 billion ($1.53 billion), with operating income before stock-based compensation of “at least” 11 percent of sales. The company also announced the Wii-exclusive Shaun White Snowboarding: World Stage for holiday 2009, the follow-up to last year’s Shaun White Snowboarding. The original Shaun White Snowboarding sold over 3 million copies since its November 2008 debut, when it appeared on multiple platforms. The new World Stage will again be Wii Balance Board-compatible.

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