Ubisoft is counting its money, Microsoft is finally failing and Take-Two is digesting Zynga in pain… this week’s business news

news business Ubisoft is counting its money, Microsoft is finally failing and Take-Two is digesting Zynga in pain… this week’s business news

Ubisoft: The worst record in its history against the background of the restructuring

The French publisher foresaw the setback in its last report, and Ubisoft’s 2022-2023 financial year is indeed one of the worst on record. Currently between two cycles with the intention of reducing the cost by around 200 million dollars, according to Ubisoft calls a year in which net losses skyrocketed “crucial”.. Over the past few months, more than 700 employees have been asked to find a new job, knowing full well that these departures are primarily related to sales and support services. Consequently Ubisoft falls below 20,000 employees around the world, which is huge considering Activision Blizzard has around 13,000 employees.

We continue with our plan to reduce costs by at least 200 million dollars over the next two years. Thanks to tight hiring controls combined with initial targeted restructuring – including the closure of five offices in Europe – the global workforce has fallen below 20,000 people, compared to more than 20,700 at the end of September 2022. (Frédérick Duguet)

But what does that mean in numbers? Wait, because they make you dizzy. Ubisoft’s annual turnover increases from 2.1 to 1.8 billion dollars

, but at the operating and net income level things go awry. In the 2021-2022 financial year, Ubisoft achieved an operating profit of $241.5 million. For the financial year that ended at the end of March, we are talking about a loss of 585.5 million dollars, that is by a net loss of 494.7 million, which corresponds to a profit of five years. To return to the game while continuing its restructuring, Ubisoft will bet very heavily on Assassin’s Creed and in particular on Assassin’s Creed Mirage.

We understood that when the various projects were announced, but these are it More than 2000 people are currently working on the license. In parallel, Ubisoft will count on the free games XDefiant, Skull and Bones, Avatar: Frontiers of Pandora, The Crew Motorfest or even Rainbow Six Mobile and The Division Resurgence. At least A AAA game has yet to be announcedbut we will know more when the Ubisoft Forward of June 12th. By wrapping all of this end-to-end, Ubisoft hopes to showcase it at the end of the financial year a profit of around 400 million in progress.

Acquisition of Activision-Blizzard: Microsoft breathes a sigh of relief thanks to Europe

The past few weeks have been difficult for Microsoft and its Xbox arm. The launch of Redfall brought the question back to the table the publisher’s ability to publish strong titles, while the acquisition of Activision Blizzard King stalled. While analysts believed so The British regulator wanted to approve the operation, but they simply said no. A resounding no blocking him on the territory. Microsoft can appeal, but that doesn’t guarantee anything, and it needed approval from a large market at all costs to have any hope of making a reasonably solid case.

On the American side, we have to wait for the FTC trial in several months, so all eyes are on the European Union. The European Commission took its time and postponed its decision until May 22 at the latest. But the verdict was published a few days earlier and it is a Very good news for Microsoft and Activision Blizzard King. The European Union actually approved the project Adoption, since the data presented and the commitments made allow the competition to continue its activities without perverting the rules.

The Commission based its decision on concrete evidence and extensive information and observations from competitors and consumers, including game developers, retailers and cloud game streaming platforms in the EU. (…) Even if Microsoft decided to withdraw Activision’s games from the PlayStation, it would not seriously affect competition in the console market. Sony could use its size, extensive games catalog and market position to counter any attempt to weaken its competitive position.

In other words, Sony’s arguments about Call of Duty and the console market are pushed aside. The EU had already brushed these concerns aside We focus on the emerging cloud gaming market, the same market that caused the CMA to say no. Microsoft’s commitments are sufficient for the EU. If the acquisition occurs, Microsoft will provide, if it occurs free licenses for all cloud services to run the games. A decision that, as announced by Microsoft management, will be extended worldwide. As for the question Leaving British territory we are on the show for now. Still, Satya Nadella, CEO of the tech giant, left the door open.

Take-Two Interactive (GTA) loses a billion, Zynga is largely responsible for it

The season of annual financial reports continues, this time with the report from Take-Two Interactive, owners of studios like Rockstar and therefore Zynga. In previous results we mentioned The digestion of the acquisition of Zynga billed 11.7 billion dollars. The publisher, which made a name for itself with its social games on Facebook, still has a huge catalog and lets Take-Two consult it Sales increase to almost 5 billion dollars, compared to 3.2 in the previous year. However, the publisher of Red Dead Redemption II, NBA 2K and Grand Theft Auto V is recording a record net loss of one billion dollars. Profits made during the two years of the pandemic have therefore skyrocketed. The integration of the results has also had a very significant impact on how the numbers are read for almost a year 80% of the income comes from so-called recurring expenses : In-game purchase, purchase of virtual currency, DLC and advertising.

To go a little further 95% of group sales are digital, if necessary a new sign of the total dominance of the dematerialized in the industry. Of course, the fact that Zynga is part of the accounts for the first time with its catalog changes the whole number. The company’s games, such as Words with Friend, Merge Dragons, Zynga Poker, War of the Fallen or Toon Blast

now make up the majority of Take Two Interactive’s catalogue. So let’s summarize: Take Two integrated Zynga, officially acquired in May 2022. At the end of the fiscal year, the publisher reported sales of 4.9 billion dollars and a net loss of one billion. As usual, companies are exploiting their balance sheets create forecaststo inform their investors of what should happen overall.

In other words, we reassure or warn before we conform. In the case of Take-Two, these predictions are particularly observable, because a certain Grand Theft Auto VI is expected, eagerly awaited. And if we look at the forecasts Fiscal year 2024-2025noting that Take Two was anticipated sales of $8 billion and over $1 billion in operating cash flow. Such sales cannot be achieved with the usual franchises, which is why many observers assume that GTA VI could be launched this fiscal year. However, be carefulas the publisher also announces “several groundbreaking games” that have yet to be announced.

Briefly in the business news of the week

• The news hit at the very end of the week, leaving it only to appear here, but China has unconditionally accepted Microsoft’s acquisition of Activision Blizzard King.
• Complete box set in two stages for The Legend of Zelda: Tears of the Kingdom. According to Le Figaro, 500,000 copies have already been sold in France. This data rules out dematerialization and gives an idea of ​​the magnitude of the launch. Let’s add that 10 million copies sold worldwide in 3 daysand you have the best start of a first-party Nintendo game.
• End, of course, for Pac-Man 99, which will be finally discontinued on October 8th.
• Saudi Arabia has increased its stake in Electronic Arts through its public investment fund. The PIF would now hold 24.81 million sharesor about 9% of the company.
• The Nintendo Switch ecosystem would have generated 69 billion of dollars according to TweakTown. This includes the billion games sold, the 125 million consoles sold and all spending on embedded devices.
• Steam will stop using Google Analytics. Valve claims tool no longer corresponds to Steam’s approach regarding user privacy.
• 2 million Xbox series have been sold in the UK since the release of the consoles. It’s faster than the Nintendo Switch, but less than the Xbox One, which then gave way to the PS4.
• 500,000 units sold for the terrifying Darkest Dungeon II, 230,000 of them after the official release of the title. So the developers at Red Hook Studio can keep smiling while our minds disappear!

Our other business articles of the week