Entertainment Industry

Category: Ubisoft

No high score for video game sales in 2011

Assassins Creed: Revelations

Besieged by increased competition for entertainment dollars and a sour economy, the video game industry saw sales drop 8% last year despite a deluge of highly anticipated titles that launched during the crucial holiday season.

Shoppers spent just over $17 billion on video games and consoles in 2011, down from $18.6 billion in 2010, according to a report released Thursday by NPD Group Inc., a market research firm.

Roughly $8.8 billion of the total spending last year -- about 52% -- went to buying games, down from $9.4 billion in 2010. The balance, $8.2 billion, was for console hardware and peripheral devices, such as extra game controllers. That figure fell from $9.2 billion in 2010.

December, typically the industry’s best shot at ringing up big sales, clocked even steeper declines. Combined sales of consoles and games fell 21% to $4 billion last month, compared with $5.1 billion a year earlier.

“Lots of people rushed into stores on Black Friday to buy games, but they disappeared in the first three weeks of December,” said Michael Pachter, an analyst with Wedbush Securities. “The stores were empty. They only came back during the week just before Christmas. Consoles in particular are way down. It’s weird, but people don’t seem to see them as gifts anymore.”

Sales of consoles such as the Wii, 3DS, PlayStation 3 and Xbox 360 tumbled 28% on a dollar basis in December, according to NPD. Sales also were down on a unit basis despite major price cuts on several consoles, Pachter said.

Consumers bought just 6.3 million consoles last month, down from 8.4 million a year earlier, Pachter noted. “That’s the lowest level since 2005,” he said.

Some of those dollars have migrated to online, social and mobile games, as well as games that are digitally downloaded, which were not included in the NPD report.

When spending for those games is included, industry revenue looks much more stable, down just 2% last year compared with 2010, said Anita Frazier, NPD’s game analyst.

"December was very rough," Frazier said. "Because of the great slate of content that came to market during the fourth quarter, I had expected December sales to represent a larger portion of total-year sales than what occurred.  This year, December accounted for just 23% of annual sales, while the average for the past 10 years has been 28%."

The year was not uniformly bad for all publishers. Ubisoft Entertainment landed three of the top 10 games sold in 2011, including two versions of its Just Dance franchise. Electronic Arts Inc.’s Battlefield 3 and Madden NFL12 took two slots in the top 10 list. And Activision Blizzard Inc.’s Call of Duty military shooter franchise took the No. 1 and No. 6 spots.

“It was a tough year for the industry,” said Tony Key, Ubisoft’s senior vice president of marketing and sales. “But if you innovate and you bring something fun, you can still win.”

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-- Alex Pham

Image: Characters in the Assassin's Creed: Revelations game. Credit: Ubisoft Entertainment

Ubisoft Motion Pictures aims to bring game franchises to Hollywood

What's Ubisoft Entertainment up to?

An article in the French magazine, Le Film Francais, stirred up a flurry of speculation this week in Variety, Wired and elsewhere about the game company's film ambitions. 

Jean Julien Baronnet It turns out that some of the details got lost in translation. Contrary to the headlines swirling in the blogosphere, Ubisoft is not launching a movie studio. But it does want in the movie business and has hired Jean-Julien Baronnet, left, the former chief executive of EuropaCorp., a movie studio co-founded by French director Luc Besson, to oversee their efforts.

Baronnet is CEO of newly created Ubisoft Motion Pictures, a boutique division within the French game company whose charter is to seek Hollywood studio partners to bring its popular game franchises to the big screen, Baronnet said in an interview with The Times. Among Ubisoft's properties are Assassin's Creed, Tom Clancy's Splinter Cell and Rayman Raving Rabbids.

ACB_Ezio_render "We have started some discussions with studios, but this is in the very early stages," Baronnet said. "We're still contemplating different options."

Those options, however, don't include launching a studio to create movies, he said. Nor does it include handing over licenses to Ubisoft franchises to any studio that comes calling with a checkbook.

"I want to take my time and make good decisions for Ubisoft," Baronnet said. "We have three requirements. The first is creative control, so we can be involved in the scriptwriting and production. The second is a royalty structure that ensures the financial security of our investments. And the third is a level of comfort that the production is of the highest quality."

Few film adaptations of game franchises have succeeded, either critically or at the box office. The list of box office bombs based on games includes "Doom," "BloodRayne," "Silent Hill" and "Mortal Kombat."

Baronnet stressed that his division consists of just four executives, including himself. Two others are veterans of the French film and television scene. Didier Lupfer, a French movie producer, has been named head of production. Jean de Rivieres, former head of distribution at Walt Disney Co.'s motion picture business in France, is head of sales and marketing.

Executives at Ubisoft, which operates 23 development studios worldwide, have long hinted at their film ambitions, saying that the skills involved in making video games are similar to those required for movies, particularly on the digital side.

-- Alex Pham

Top Photo: Jean-Julien Baronnet, the former chief executive of EuropaCorp, who is spearheading Ubisoft's cautious move into motion pictures. Bottom image: Ezio, a character from Ubisoft's Assassin's Creed franchise. Credit: Ubisoft.

Ubisoft's Rocksmith music game: Will it be in sync with consumers?

Rocksmith on Xbox 360 While Activision Blizzard is running away from music games by shutting down its once booming Guitar Hero business, Ubisoft is diving headlong into the category.

The French-based video game publisher on Tuesday announced plans to release Rocksmith, a music game "with benefits," in September.

The chief benefit is that the game promises to teach people how to play a real electric guitar. Players can either plug in a guitar they already own or buy a version of the game that will come packaged with an entry-level guitar from a major guitar manufacturer.

"You will acquire the skills of a guitar player, and you won't even know it," said Tony Key, Ubisoft's senior vice president of sales and marketing. "We call it gaming with benefits."

Sales of music games plunged 46% last year, the steepest drop of any game category, to $1.06 billion, according to market research firm NPD Group. With Activision out of the Guitar Hero business and Harmonix being reorganized after its fire sale last year to a private investor, the genre is expected to have another rough year in 2011.

That doesn't seem to phase Ubisoft, whose Just Dance franchise sold 5.2 million copies in the U.S. last year, making it the best-selling title in the music genre.

In fact, Guitar Hero's absence may help Rocksmith by reducing competition on store shelves this fall. One company, Optek Music Systems, which makes the Fretlight interactive guitar, claimed that sales of its product surged 18% after Activision announced it would bail on Guitar Hero.

It may also help that Rocksmith is much different than previous music games in which players try to press buttons to match the rhythm, said Colin Sebastian, analyst with Lazard Capital Markets. 

"In concept, this game has the potential to have broad appeal because many people want to be able to play the guitar," Sebastian said.

One wild card is the game's price tag. Ubisoft is still debating how much it will charge for the game, which will come with a special cable that plugs into a standard electric guitar on one end and to a PC or a game console such as the Xbox 360 or PlayStation 3 on the other.

Some musicians including Prince have openly snubbed music games. He said in a 2009 interview on PBS that he turned down an offer to have his song on Guitar Hero. "I just think it's more important that kids actually learn how to play the guitar," he said.

That's what Rocksmith plans to deliver. "In most of these games, you were just pressing buttons on a cheap plastic game controller made to look like an instrument," said Paul Cross, the game's creative director. "We wanted our game to be the real thing."

For more details on the game and how it teaches users to play the guitar, click the continue reading link below.

Continue reading »

Top 10 video games of December and full year 2010

Call of Duty Black OpsVideo game players heard the call and snapped up more than 12 million copies of Activision Blizzard's Call of Duty: Black Ops in 2010, making the title the best-selling game of the year, according to a report released Thursday by NPD Group.

Though sales of video games played on consoles such as the Wii, PlayStation 3 and Xbox 360 fell 6% to $9.36 billion in 2010, total game software sales were about $15.5 billion last year, roughly flat compared with 2009. That's because sales generated by PC games, smart phone games and online virtual goods grew last year, making up for much of the lag in console games, according to NPD analyst Anita Frazier.

That means spending has shifted from traditional disc-based games to online and digital titles distributed online via venues such as iTunes, Xbox Live, OnLive, Steam and, increasingly, Facebook.

"For some consumers, spending a few dollars here and there on social games is psychologically easier than spending $60 at Best Buy for one game," said Paul Verna, an analyst with eMarketer in New York. "For others, it's about the convenience and instant gratification of being able to download something immediately. The more content that becomes available digitally, the more the revenue will shift."

For now, disc-based games continue to rule, accounting for the majority of dollars spent on games.

To see the top 10 PC and console titles for December and for the full year, continue reading.

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