Ubisoft hits its Q3 earnings targets while betting big on The Division 2

Here’s the bad news from the latest Ubisoft earnings call: The company’s profits are down year-over-year. But that’s about it in terms of bad news, and while profits were down, the company still exceeded its targets for Q3. The big success of Assassin’s Creed: Odyssey is cited as one of the reasons for the company hitting its targets despite a competitive season, and a great deal of growth is expected in Q4 alongside the launch of The Division 2 in the very near future.

Ubisoft's Q3 net bookings were down 16% year-over-year at €605.8 million ($684.3 million), but were nonetheless ahead of the company's target of €600 million ($678 million). Sales were €18 million ($20 million) lower than targets at €562 million ($635 million), but Ubisoft explained this as being due to a later clarification on International Financial Reporting Standard (IFRS) 15 rules, which took effect in January of 2018.

In the net bookings breakdown for Q3, one interesting shift is that net bookings on PC, mobile, and Nintendo Switch are considerably up year-over-year, while PS4 and Xbox One are both down. 24% of Q3's net bookings were on PC vs. 15% for Q3 last year, while mobile moved from 3% to 8% and Switch went up from 6% to 11%.

That same IFRS 15 clarification that pushed Ubisoft below sales targets also affected the company's full-year targets slightly, dropping sales expectations from €2 billion ($2.3 billion) to €1.9 billion ($2.1 billion). Net bookings targets were confirmed at €2.05 billion ($2.32 billion).

For Q4, Ubisoft also confirmed its targets of €571 million ($645 million) in sales and €698 million ($788 million) in net bookings, which would be up 29% year-over-year. Those numbers will be driven by the releases of Assassin's Creed 3 Remastered, Far Cry: New Dawn, Tom Clancy's The Division 2, Trials Rising, and DLC for games such as Assassin's Creed: Odyssey, For Honor, Steep, Tom Clancy's Ghost Recon Wildlands, and Rainbow Six Siege.

Some of the triumphs of 2018 included an increase in install bases across consoles, including a 21% increase on PS4 and Xbox One and a whopping 115% increase in the Switch install base. Assassin's Creed: Odyssey, the company's major title for Q3, was the 10th biggest seller for the year despite its release so late, while Far Cry 5 ranked at No.4.

Meanwhile, Rainbow Six Siege reached 45 million total players over time, and the majority of its revenues are coming from add-on and DLC content. Ubisoft is currently in the process of trying to release the game in China as it works to expand its reach in Asian markets.

It turns out that internal metrics for The Division 2 are looking quite good for the title, as Ubisoft has reported record numbers for the beta signups and six times the orders through Ubisoft’s own storefront. This is apparently one of the big motivating factors for moving the title off of Steam and onto the Epic store, as it exposes Ubisoft to a different market and is meant to drive more people to Ubisoft’s own client where they have more complete control. Mission accomplished, it appears; let’s see if that leads to the record-breaking numbers the company wants.