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Ubisoft Q1 2015 financials; 56% revenue from digital sales
- Thread starter MauroNL
- Start date
What am I going to do with all these discs duder?
Yup Xbox One sales dropping down to the level of 360 software sales is seriously not a good look. Even worse when even the PS3 is providing the same amount of sales for Ubi as the Xbox platforms.
Obliterator
Member
Which, we can take away something we always knew as well.
PC generates longer legs than consoles, while console sales are more front loaded. Benefits to both.
On console, you see a greater percentage of full priced sales. Great for driving those huge number quarters. PC still contributes a solid number to launch month but no as high as consoles will.
On PC, you get longer legs, at a higher profit point, and sustained revenue. This is nice for quarters like we have now where there aren't any major releases. Suddenly PC becomes very important and a huge part of your business due to the sustained volume you will see.
For sure benefits to both but I think its safe to take away PC has to be a priority going foreward for Ubi.
I don't think the percentage breakdown is digital only, correct me if I'm wrong.
I really want to say it's because of how preorders work on Xbox one compared the ps4
It's real simple with the ps4 but the Xbox one usually has like 3 different versions of the game and 2 of them are unavailable to preorder.
It's so fucked hopefully they fix that
Interfectum
Member
PC > Xbone + 360
Pretty crazy.
Pretty crazy.
CosmicQueso
Member
Word.
You can make a PC game today and it'll still be selling 5-10 years from now. Not so with Console games (for the most part).
Given the low Day 1 volume on PC, and given the recent challenges with AAA PC releases and refunds, wouldn't be surprising at all to see everyone go the GTAV route of delaying the PC release.
MrNyarlathotep
Banned
Given these digital sales are being explicitly attributed to long-tail sales of older titles, I think the argument can be made that digital in general creates an environment that allows for long tail sales.
Which shouldn't actually surprise anyone, as digital means you can offer titles for sale forever and not have to worry about taking up real estate.
Do you really believe this makes a difference?
Obliterator
Member
Honestly that wouldn't bother me much at all if it ensures that we will get high quality ports like GTA V is.
That's not necessarily true. The day one Witcher sales were keeping pace with the PS4, and likely at a significantly higher profit margin.
Rockstar has always had a strange relationship with the PC platform. Late ports, loaded with DRM, they are really outliers.
Breakfast at Noon
Member
That would be solid thinking if ps4 and x1 sales were equal.
Interrobang
Member
I have an intense fear of an all-digital future. Numbers like this make me thing everyone's going to put all their eggs in the digital basket.
My anger is sarcasm. Well, maybe half sarcasm. Other half, fear.
Reasonable DLC is okay, like Dark Souls where its basically an entire campaign. Arkham Knight-style split everything up or Capcom-style rip out features and sell them or Destiny-style nickel-and-dime loyal fans to death DLC needs to go, yes.
Just scared of a digital future with data caps, throttling, hdd space, etc.
Oh yes, I was rolling in it for that.
Show them off to prove you're a GAMER.
I don't think that's a good assumption at all. Price differences usually don't let that assumption be anywhere near concrete. If I sell Watchdogs for £7 and make a £2 profit or sell it for £15 still making a profit of £2 with additional fees makes little difference to Ubi. If Ubisoft does a platform specific sale then revenue usually increases too but profit does not increase as much. Price differences in the market make assumptions like this merely guesswork.
On topic the take away points from that table are:
Mobile saw a massive increase for Ubi.
PC saw an increase in revenue too.
XB1 revenue is really low, at last gen levels, both the PS3 and 360 matched it.
Obliterator
Member
That was also a PC only franchise for a wile though.
That said Batman did over 350k on Steam with an atrocious port and with refunds, and not being on sale for more than a few days. That's not really a number worth ignoring at launch either.
I think its going to be a case by case scenario. Depending on what the studio has in terms of manpower and how much they feel the internal cost of having the PC port ready for launch is worth.
Either way, it doesn't make much sense at all for devs or pubs to ignore PC anymore. Its guaranteed sales volume for extended period of times at high profit percentages.
Might and Magic franchise at least.
Obliterator
Member
Its not debatable with this quarter in any way shape or form lol. This is sales revenue not units.
Even if they aren't equal though, the sales ratio is something like 2:1, not 2.7:1
CosmicQueso
Member
Rockstar is an outlier, but their delayed ports have also had strong, and long lasting, sales success on the PC platform.
CDP is also an outlier. You can't look at anything CDP and project that to the larger market. CDP has a very unique and special place within the industry and the PC gaming community.
But if you go to less of an outlier, like Assassin's Creed, one can very easily see why Ubi would want to avoid day/date in the future after Unity, and go back to their previous PC delays. For a normal title, day 1 PC sales aren't as meaningful on PC as they are on Consoles, but the tail is much more important. So getting the PC version right at launch (especially with STEAM refunds now) will become much more a focus than getting it out day/date.
Obliterator
Member
Agreed 100%. Its a much better idea to delay the game a bit and ensure the PC port is solid, than to rush it out with little work and release a total dud. You can see Ubi is back to thinking this themselves with their comments on how they will get the PC version of Syndicate right this time, and that it won't hit at the same day as consoles. Personally, as a PC first gamer I am fine with this. I'd rather wait a few months for a solid product than pay cash to get something broken just to have it at the same time as console with little effort put into it.
I know it's not units. I'm saying it is debatable in any quarter though. When you have price differences in the market you cannot make such assumptions because profit margin can be the same even with added fees when the price of games are different. If a platform specific sale is on too it skews numbers in either direction. It's not a sound assumption to say revenue is the same and 4% more profit when you have difference in prices in the market.
Svartafaran
Member
Surprised at the percentage of digital sales
MrNyarlathotep
Banned
The same reason it was also bouyed with ongoing digital sales of older titles; a general lack of new games being released for the Xbox One and PS4 and people wanting to play things on their expensive new consoles.
Obliterator
Member
But in terms of TOTAL revenue this quarter between PC and PS4 its a 4% difference. That's total volume of dollars.
Do you think that the profit margin between the total volume was greater or less than 4%? If this was a big quarter month I would 100% believe PS4 did more profit for them. I'm sure YoY last year PS4 wrecked PC in both revenue and profit for Watch Dogs launch.
But between the two this particular quarter? Given how close revenue is between the two I would be really surprised if PC wasn't number 1.
But yeah, there is no way to be certain without a profit breakdown per platform from Ubi. You could be right or me, no way to know for sure. But its my belief that per platform PC was the driver of profit for the quarter.
Dat math.
Me either. I thought it woulda been PS4 > XBO > everything else.
Mr Moose
Member
I wish it wasn't
I had my fingers crossed watching E3 hoping they wouldn't show it (screw Ass Creed after the Unity crap).
I'm not so sure mainstream AAA games are that great of an example either.
It's a different demographic, so games like Assassin's Creed and Call of Duty really struggle on the platform.
A digital game sold on Steam accounts for 70% profit for the publisher, while a game sold at physical retail accounts for 29% profit for the publisher. Considering how a much higher ratio of games are sold digitally on PC than on other platforms it'll net more profit per copy sold. Even a $60 game discounted for half price on Steam would give more profit than a full priced retail game.
Source?
MrNyarlathotep
Banned
FTFY
EDIT:
It's also not fixed amounts; digital copies have a flat rate percentage on whatever it ends up being sold at. Retail copies incur fixed costs, so a bomba title being fire saled makes less revenue for everyone proportionately.
Obliterator
Member
Eh AAA games have plenty of life on the PC platform and don't really struggle. Its just expectations have to be different. You can in the long run sell literally millions of copies of even AAA games. Plenty have done so. Its just your launch month sales will not be the same type as console.
PC volume is about the long haul. Make a solid port, and just watch the steady flow of money come in. Its not the same as console, where honestly a game is made or broken by really the opening few months of sales. PC is about years of steady volume.
Obliterator
Member
70% revenue for all digital games through Steam. Nowhere even remotely close to that for a retail product. If you have your own platform like Origin or Uplay, you see a 100% revenue return.
You can sell a PC digital game for half the price as a console game and see the same amount of revenue return.
CosmicQueso
Member
Which is why it makes sense to delay on PC and get it right (if there's any doubt on quality)...
Why the hell are new games so much more expensive on digital stores than in retail if publishers make much more money from digital sales?
Then new games should be a $50 digital $60 physical to make it more fair. You pay more for the physical product because you own it physically and it costs more to produce.
It's mainly just common sense.
A physical console game sees profits split between publisher, platform holder, manufacturing, distribution, and retail outlet.
PC is generally just a split between publisher and retail outlet, Valve eats the distribution costs.
That is true, but I was just pointing out the demographic differences.
You will have games like Assassin's Creed or Call of Duty which will have comparatively negligible day one sales. Then you have something like Witcher or Battlefield, which will match or exceed the console versions.
Most definitely.
Warner must be losing millions right now from Arkham Knight.
The platform royalty fee alone makes a difference. Then there's Uplay where UBi gives no cut at all and the fact that the PC has proportionally a higher % of digital buyers which has much better margins than a physical purchase.
Because they don't want to put pressure on the retail price.
What's the percentage for digital console games?
Why do you equate console to physical?
Obliterator
Member
Pretty high and something for sure worth noting. As digital sales grow on console its going to get pubs even better percentage of profit / revenue.
That said, launch time frame sales for almost all AAA games sit squarely between 10-20% digital. The vast majority of AAA games sold at launch still sell at retail.
Edit: Also remember that pre-owned on the console market eats into sales over time, where PC has no such thing. Every copy of a game sold through PC money goes to the dev / pub. Not the case with console.
The only market where it keeps up with the PS4 is the US.
The complaints about Ubisoft's ports are hugely exaggerated and if we're talking about them relative to their console versions, then it's not really an issue. I can't remember the last time a Ubisoft game was worse on PC than it was on consoles and most of the recent ones have some nice PC exclusive effects - which is more than can be said for most games from the big AAA publishers.
Everyone on forums like these complain about Ubisoft regardless of platform, but their games sell a lot anyway - which is probably why it's a good idea not entirely base your opinion on perspectives from enthusiast forums/websites.
Mr Moose
Member
What surprised me is that Xbox One is the same % as PS3/Xbox 360.
Thanks, hadn't considered that retail aspect.
A few reasons. It's not wanting to mess up relationships with physical retails, this is especially true with console digital prices. Otherwise it's because they can and because people will pay it.
It's what the certain region is willing and able to pay. Steam has expended its market dramatically by urging publishers to sell digital products at a huge discount in third/second world countries because that's the price they're willing to pay (at least 200k copies of GTAV PC were sold in China at $30, which is a huge number for the region). While Australian's pay $60-$70 because of their higher standards of living and wages.
It's what they can get away with.