Ubisoft: Q3 Results and Cost Reduction Program Ahead of Schedule

Ubisoft's Q3 net bookings are in line with revised expectations. The review of strategic options is ongoing, and there are high hopes for Assassin's Creed Shadows. The cost reduction program will be achieved by the end of FY25, ahead of schedule and in excess of €200m.

Ubisoft has published its Q3 2024-25 financial report. Net bookings for the third quarter were in line with revised expectations at €301.8 million and for the first nine months at €944.0 million, a decrease of 34.8% compared to the same period last year. Back-catalogue net bookings reached €762 million for the first nine months. IFRS 15 revenues for the first nine months amounted to €990 million (-31%). "Excluding partnerships, back-catalog net bookings were down mid-single digit year-on-year in Q3 and up mid-single digit year-on-year over the first nine months of the fiscal year," the publisher said and confirmed its targets for the full fiscal year of around €1.9 billion in net bookings and around breakeven in non-IFRS operating income and free cash flow.

Hopes are high for Assassin's Creed Shadows, scheduled for release on 20 March 2025. According to Ubisoft, pre-orders are in line with those of Assassin's Creed Odyssey, the second most successful entry in the franchise. "I want to commend the incredible talent and dedication of the entire Assassin's Creed team, who are working tirelessly to ensure that Shadows delivers on the promise of what is the franchise's most ambitious entry yet," said Yves Guillemot, Co-Founder and Chief Executive Officer.

According to the CEO, the company is making good progress with its cost reduction programme. Yves Guillemot: "As a result of disciplined execution, we have announced further targeted restructurings, making difficult but necessary choices, and now expect to exceed our cost reduction objective by the end of FY25, ahead of schedule. We plan to pursue our efforts in FY26, going beyond the initial target by a significant margin." The reduction of the fixed cost base will exceed €200 million by the end of FY2024-25 compared to FY2022-23, ahead of schedule, partly due to the closure of four production studios in high-cost regions and targeted restructuring at three other sites (including in Germany).

In terms of possible takeover bids or other plans to take the company private, the Ubisoft CEO had little to say. "Finally, the formal review process of our strategic options announced earlier this year is now ongoing. Ultimately, the objective is to unlock the best value from our assets for our stakeholders and to foster the best conditions to create great games in a fast-evolving market. We are convinced there are different potential paths to achieve this ambition."

"Since the beginning of the fiscal year, MAUs across Console & PC stood at 36 million, broadly stable year on year and activity metrics have been solid with Playtime and Session Days per Player respectively up by 4% and 7%." Rainbow Six Siege continues to perform strongly, with December activity broadly in line with last year on a high comparative base. "Session Days per Player in Q3 grew year-on-year, while Year 9 Season 4 reception was solid, culminating in December achieving the highest monthly ARPPU (Average Revenue per Paying User) in the game's history. (...) Over the first nine months of the fiscal year, the game's activity has been stable year-on-year, and its playtime grew solidly." In terms of back catalog, the Assassin's Creed franchise performed strongly throughout the quarter, particularly with the release of Assassin's Creed Mirage on Steam. The Crew Motorfest, now in its second year of content, retention and monetisation metrics, continues to outperform The Crew 2 since launch and reached its highest monthly player count to date in December. Overall, The Crew franchise experienced a 38% year-on-year increase in session days during the quarter.

At the investor conference, Guillemot reaffirmed the company's two core verticals: open-world action-adventure and native game-as-a-service experiences. The CEO believes the company is well positioned for the coming years. Looking ahead to the next fiscal year, which begins in April 2025, he teased big plans for Rainbow Six and confirmed Anno 117: Pax Romana and The Division: Resurgence on mobile for that fiscal year.

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