Ubisoft Reports €139m in Sales, Boardroom Strife Beckons

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Ahhh Ubi (EPA:UBI). How nosotros dearest y'all. Or non, depending on what we're discussing. It's no undercover that the company isn't the most loved by gamers around the globe, having suffered from buggy launches (yes Assassin'southward Creed Unity, I'm looking at you!) and graphical downgrade controversies over the years.

Well, it appears we dear Ubisoft again, at least we did this quarter as it seems like you just can't go on a skillful developer/publisher downwardly since today Ubisoft reported earnings chirapsia its initial target for the quarter of €125m.

Up, Upwards! UP!

It has been an extraordinary quarter for Ubisoft, beating expectations to come up in at €139.1m for the quarter. Upward 44% vs. sales from the same quarter concluding twelvemonth, fifty-fifty accounting for exchange rate fluctuations. Somewhat surprising given they didn't have any huge releases in the last quarter (The Partition was before released before it).

Given that Ubisoft is still standing past its full year expectations of €1.7bn, it's off-white to say that this represents a very small function of the overall pie and although a solid get-go to the year, they demand to make sure they deliver (and deliver well) on the large titles slated to launch afterward this yr in Lookout man Dogs 2, Steep and South Park (due before the end of the agenda year), while For Honour and Ghost Recon drop before the end of the financial year in February and March respectively.

Even so, the market place seems happy with their trajectory and Ubisoft shares airtight the day upwards 4.53%.

The Ubisoft Strategy: Going Stale?

Proceed in listen though, that while Ubisoft (EPA:UBI) has had a decent quarter, the picture over the medium to long term has been a flake of a mixed bag from a gamer perspective. This has reflected over fourth dimension in the quality of their earnings. The videogame business is a very cyclical one, hence we see such relatively paltry amounts beingness reported at present with big releases coming around subsequently in the year. But add onto this the slightly antagonistic view some gamers accept these days of the company releasing "yet another Ubisoft game" and it seems articulate that the open world strategy, which has helped them to a point is starting to feel a lilliputian tired.

This has been reflected over the years in the quality of their earnings and some wonder whether the company needs some fresh impetus with which to tackle the likes of Electronic Arts (NASDAQ:EA) and Activision Blizzard (NASDAQ: ATI).

Boardroom Backdoor?

This of course is all ready against the properties of Vivendi (EPA:VIV). For those who are unaware, Vivendi is the French media giant who besides at 1 fourth dimension owned Blizzard and recently acquired a controlling stake in Gameloft last calendar month. Gameloft existence founded and run by Michel Guillemot (one of the Ubisoft Guillemot founding brothers) until terminal month when he stepped downwards.

Both Michel and Yves (current CEO of Ubisoft) have gone on the tape to state that they view Vivendi's interest in their companies every bit hostile, particularly given that information technology was announced yesterday that Vivendi has congenital up a 22.8% stake in Ubisoft and at present controls 20.2% of its voting rights, having increased its pale past ii.7% last month alone.

Although Vivendi has stated it doesn't intend to acquire Ubisoft (thereby barring it from acting to accept information technology over in the next 6 months), nether French law if the business firm acquires more than than 30%, it will be obliged to make an offering to buy the company outright.

For its role, Vivendi is trying to wrangle a place on the lath, just the brothers' Guillemot are reportedly vehemently trying to block this and Vivendi don't yet own plenty of the voting rights to guarantee a place on the board.

Although Gameloft probably represents a better return on investment for Vivendi, particularly given its focus on mobile which we know, (despite wishing it were non so) is often cited as the future of gaming (just look at Nintendo'due south share toll surge since Pokemon Go launched), Ubisoft is clearly the jewel in the crown of the French gaming industry and it would appear that Vivendi has its eye on the prize.

Mobile is definitely non the force...

Peradventure more importantly, information technology may allow for some much needed reinvigoration of the Ubisoft lineup and then merely peradventure, amend earnings. There is still a long way to go in this boxing. We'll be following information technology closely, although what is best for earnings is not necessarily in the best interest of core gamers...