Conference call begins at 18:15 CET (17:15 UTC). Paraphrased live transcription will be posted below!
- Thanks for joining us!
- This quarter has been a turning point for us.
- 11% Market Share threshold passed in calendar 2012.
- Calendar 2012 insights: physical market went down est. 20% (more than expected: US 22%, 15%), most decline attributed to consumers waiting for next-gen to come. This cycle has lasted too long and lacked major hardware innnovation. We are getting closer and closer to this new generation, boosting the market significantly, boosting Ubisoft's performance.
- Assassin's Creed delivers great revenues and profitability. Great asset for Ubisoft.
- Far Cry 3 - sold 4.5mil units, way better than expected. 2x better than Far Cry 2 in half of the time. Fantastic open world gameplay, making it unique. Nothing like it. Gamers love it. Expect Far Cry 3 to continue well in coming months.
- Players eagerly waiting next Far Cry. 4 year gap between 2 and 3. We worked hard to find right gameplay. Now we have it. Fans won't have to wait 4 more years for the next one.
- Drive from digital distribution from XBL, PSN, Uplay, Steam are not taken into account in monthly NPD. As a reference, it is fair to expect digital distribution to represent 6-7% of each game. This % should continue to grow in future.
- Total back catalogue revenue down 1% versus last year in 1st 9 months of the year.
- Online sales boosted by F2P. 137% for first 9 months of year. Postponed some titles in next fiscal year, e.g. Assassin's Creed Utopia. Optimistic of F2P prospects.
- Trials Evolution (Xbox LIVE) was rated as one of the best games of the year. Set to be released on PC in March.
- Wii U: satisifed by US/EU market share. 20%/27%. Nintendo's upcoming brands will boost potential.
- Just Dance better than prior expectation. Close to 8mil units sold. Franchise demonstrating it is unique. Very committed fanbase. Success stems from combination of the best songs and high quality/innovative gameplay, casual, easy to play, fun experience. 2nd biggest seller in US in September. Calendar 12 5th biggest seller in world.
- Looking forward we believe momentum will continue. Stronger core segment, digital distribution, F2P. Trends compensate for drop in casual revenues. Core games coming up include Splinter Cell Blacklist and Watch Dogs. Will benefit from stronger focus.
- Splinter Cell has been in making for 3yrs, will be a great title. Much larger scope, deeper single/co-op/multiplayer. The game looks/feels fantastic. Players get free reign to create Sam Fisher to meet their game style. Assassin's Creed/Far Cry demonstrates players want to define their own experience. Splinter Cell Blacklist is doing just that. The additional time transforms it from 'good' to 'fantastic' and will be beneficial.
- Watch Dogs. So much confidence, similar to when we launched Assassin's Creed. We are eagerly looking forward to reveal more details. Stay tuned for more. It will come.
- Proud to announce FY 14 new Assassin's Creed by new team/new time period. Another major leap forward for franchise. More details to come.
- Rayman Legends now multiplatform on Xbox 360, PS3, Wii U (FY 14).
- Other titles coming for FY 14 include Shootmania. (note: no reference of Rainbow 6)
- Next-gen is coming. Believe it will boost market. Pipeline of franchises and new IPs, releasing more regularly. All combines with online expertise and know how, arriving with next-gen and growth of online market.
Q: Talk about next-gen. How much cost is anticipated in next FY to come from development in next-gen?
A: We are clearly not in a position to give further details, as people understand. So it's complicated to breakdown investment by platform. I apologise. We can say when we develop titles, now we develop on many formats.
Q: You said 16% of FC3 sales came from Digital. 16% of overall or PC?
A: Overall. Might be interesting for you that going forward (this can change), on average, on new release products about 6-7% of sales will be digital, up from <2%. Interesting reference, of course each game might change. We know it will continue to grow. Back catalogue, digital distribution is getting closer to 50%. 6-7% is more for new releases.
Q: Just Dance. New version coming out Fiscal 14? Do you expect franchise growth?
A: Only gave indication of overall casual market, we anticipate a gain in core games and digital revenue, year of download trends (casual).
Q: What's your thought at this point on the contribution from Wii U this year?
A: I think we are holding at about 40mil of sales this quarter. Considering Ray-Man delay, between 40-50mil, not as big as we anticipated.
Q: Far Cry follow on sales, post Black Friday.
A: Very good actually. Game continues to sell well in US/EU, expect it will continue to grow, DLC is coming. One of our strongest products for last 3 weeks, doing well on digital.
Q: Coming quarter?
A: We have been prudent about guidance for end of FY. We are seeing market is tough, given fact we have postponed a few products, we prefer to take prudent stance on Q4. We have to wait 'til May to give you more.
Q: How was January?
A: As we said, top games have been doing well. Our strongest product is probably FC3 right now, in line with expectations.
Q: Recent acquisition.
A: We are going to see projects in the long run. We will be able to work with those resources on the products we are working towards for next year. Studio will be part of our network of studios and will help to grow upcoming games. South Park was a few months away from release when bought, we are excited, has potential. In the case of THQ Montreal, we don't feel we overpaid. We have both a team working on an interesting long term project, and long term resources on our other projects. Good addition to our resources.
Q: Can we expect other acquisitions?
A: Unless somebody else goes bankrupt, I don't know. I hope not! Normally we would be more focused on online/digital/mobile, it just happened to be the right price and a good deal.
Q: Talk about PSN/XBL downloads?
A: This is becoming more and more important on consoles. Sony pushed that first, we think Microsoft will make it happen closer to the launch of games at retail. PC downloads are more than 50% of revenue (Quoted Far Cry figures include all platforms). PC is giving more of a push, if consoles becomes more connected, we might have a boost. Nintendo is doing more than they used to on that front.
Q: Vita Digital Downloads?
A: 15-20%, more important in US than EU.
Q: After your heavy support for Vita, 3DS, Wii U - are you rethinking SKU counts for hardware launches?
A: We have always been early on new consoles. Sometimes it works, sometimes less effective. With new console launch, it's interesting for us, to make them shine on the market. It's a strategy to push our brand and to create new IPs. You have to look at this strategy in the short term and long term. Regarding Vita, last FY, we did pretty well on Assassin's Creed, close to 600k units - pretty happy with figure. I wouldn't discount PSVita, right quality, it might work.
Q: Pretty much everything has gone right for you, still looking at 25% lower operating profit though. Curious, what is your longer term view on operating margin?
A: It's very important to consider the business growth in two dimensions in current-gen and next-gen. Other side is F2P and digital. This has been a large investment for us. We will have revenue coming from next-gen, very good quality products using best technology possible.
Mobile/Digital helps growth in territories where consoles are not so strong. We mentioned casual went down 30%, Wii U went down quite significantly, stopped Facebook operation. We had some great success. One thing to consider on new consoles, always very interesting to develop at beginning of console, e.g. Wii U costs are getting cheaper. Continue to develop brands across all platforms. If machine takes off as we expect, we will get good revenues, like Vita this year.
Q: Looking at next-gen, do you have any clarity on console differences, forward/back-compat, core engine development transition?
A: The machines have fantastic potential, they will help the industry to grow exponentially because they are bringing innovation that will be fantastic for the industry. For 1st 2 years of next-gen, we expect no cost increase, due to the fact we can use lots of the engines we created on those machines, and use F2P/digital models, developing lots of elements to use on the games for those machines. As for forward/back compatibility, ask the manufacturers.
Q: Far Cry 3: Mix between consoles and PCs?
A: 1mil units on PC, 3.5mil on console.