So What Actually Happened With Ubisoft’s Finances
When Ubisoft suddenly postponed its quarterly financial report and paused trading of its stock, the internet went straight into meltdown mode. People started guessing everything from a massive buyout to a total financial disaster. In a world where giant deals like Microsoft buying Activision have become reality, those theories did not feel completely impossible.
But the reveal turned out to be far less dramatic. According to Ubisoft chief Yves Guillemot, the delay was basically down to one thing. The company brought in a new panel of auditors which shareholders had approved earlier in the year.
These new auditors took a fresh look at how Ubisoft was recognizing some revenue from an existing partnership. They decided the company needed to account for that income in a different way than before. That sounds small but it had a knock on effect.
Because the accounting method changed, Ubisoft’s numbers suddenly pushed it beyond a financial covenant it had agreed to. In simple terms, the company has rules with its lenders about how much net debt it can have compared to its core profit. The new way of recognizing revenue made that ratio look worse on paper.
To fix that and get the debt to profit ratio back where it needed to be, Ubisoft had to quickly pay back 286 million euros worth of loans. That was enough to bring things back in line and calm down the financial side of things.
So instead of a secret acquisition or a catastrophic collapse, it was more like a boring but important accounting adjustment that briefly tripped a wire in Ubisoft’s loan agreements.
Assassin’s Creed, Rainbow Six, And What Players Are Doing
Once you get past the finance side, the report did have a few interesting bits for players. The big highlight is that Ubisoft is very happy with how Assassin’s Creed Shadows is performing.
Rather than sharing raw sales numbers, Ubisoft leaned on a softer metric it calls session days. A session day is basically any calendar day on which someone plays the game. If you play on Monday and Thursday that is two session days.
According to Ubisoft, Assassin’s Creed Shadows has generated 211 million session days so far this year. That is a huge amount of play time and the company says it is around 35 percent higher than the average from the previous two years for the series. In other words people are not just buying the game, they are consistently logging back in and spending time with it.
Rainbow Six Siege also saw a boost in session days. The game recently went to a free access model which usually increases player counts because there is no upfront price barrier. More players means more potential spending on cosmetics and other extras.
However Ubisoft admits there is a downside to that free access move. The company says it has seen a temporary surge in cheating which has hurt both overall activity and how much players are spending compared to its expectations. This is a classic problem for popular competitive games that open the gates wider. More people flood in and a fraction of them will try to break the rules.
Ubisoft says it is working on it and implies that anti cheat efforts are underway to bring things back under control. For Rainbow Six fans that likely means more bans, patches, and possibly new tools to track suspicious behavior.
What Is Coming Next From Ubisoft
The presentation alongside the financial report also gave a quick look at Ubisoft’s upcoming lineup. Some of it is expected, some of it is more mysterious.
Here is what is on the current list.
- New DLC for Avatar which should expand on Ubisoft’s big movie tie in world.
- Rainbow Six Mobile which aims to take the tactical shooter style gameplay to phones.
- The Division Resurgence another mobile project that shrinks down the looter shooter universe for on the go play.
- The long awaited remake of Prince of Persia The Sands of Time giving a classic action platformer a modern overhaul.
Then there is one more thing. The slide includes a simple blank box labeled Unannounced title. That is all Ubisoft has officially said but of course that is more than enough to get people guessing.
The most likely suspect in a lot of minds is the Assassin’s Creed Black Flag remake. It has been heavily rumored and leaked for a while even though Ubisoft has not properly revealed it. Given that Black Flag is one of the most loved entries in the series, a remake would make a lot of sense for the publisher both creatively and financially.
Until Ubisoft is ready to talk, that box will stay a mystery. But the rest of the report sends a pretty clear message. Despite the scary looking delay and stock halt this is not a company in free fall. It is a company dealing with some dry financial housekeeping while its biggest brands keep pulling in players.
For anyone watching the industry the lesson is simple. Not every dramatic move on the stock market means a secret buyout or a crash. Sometimes it is just the new accountants asking awkward questions while everyone else gets on with making more games.
Original article and image: https://www.pcgamer.com/gaming-industry/ubisoft-hasnt-exploded-or-been-bought-by-tencent-its-finances-were-delayed-because-of-maths-nerds-ac-shadows-is-overperforming-and-its-got-one-upcoming-game-you-dont-know-about-thank-you/
