Q1 2025 Ubisoft Entertainment SA Corporate Sales Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nicolas Langlet - BNP Paribas SA - Analyst : Yes, good afternoon, everyone. I've got three questions, please. First on XDefiant, is it fair to say that most of the EUR41 million new game booking is mostly related to XDefiant or there were other games you would highlight. And still on XDefiant, can you tell us how the engagement has evolved since the release of the Season 1 a couple of weeks ago? Secondly, on back-catalog, so I'm surprised to see that back-catalog is only up 2% despite the strong metrics on Rainbow Six Siege. You mentioned the steam release and promotion, but Q1 last year had EUR250 million was not that high, so anything else you would point? And looking at the full year on back-catalog, what are you expecting? Is it stable, declining year-on-year? Any indication would be a pull? And finally, on the Activision Blizzard's training deal, you mentioned in the past, the addition of Activision game into the Ubisoft subscription offer. Any update to share? Or are you still expecting this to happen this year?

Question: Nicolas Langlet - BNP Paribas SA - Analyst : Okay (inaudible).

Question: Nick Dempsey - Barclays PLC - Analyst : Good evening, guys. So when I look at the guidance for Q2, can you hear me?

Question: Nick Dempsey - Barclays PLC - Analyst : When I look at the guidance for Q2, and if I assume something similar for back-catalog in Q2 as Q1, kind of getting to EUR200 million to EUR230 million, that sort of range for the new release Star Wars Outlaws. I'm getting that, when I look at the $70 price and then assuming what you might get from ahead , I'm getting to around 5 million units, something in that sort of bracket. First of all, where can I be going wrong with that thinking? And secondly, are you just being pretty conservative in your guidance? Because I guess given the interest in that game, we might have thought it would be more than 5 million units. Second question, if partnership deals were to land in the second quarter, would you know about that by now and therefore, would you be including that annual guidance? Or is it plausible that you could land the partnership deal and that could come into Q2, but you just haven't included it in your guidance because it isn't confirmed yet. And then the third question, when I look at the second half, Clearly, I think we're going to need a heavy contribution from Assassin's Creed. But could it be that those revenues will in fact be boosted by multiple hundreds of millions of partnership deals, that kind of range to get us over the line?

Question: Nick Dempsey - Barclays PLC - Analyst : Okay, and when you talk about it being the most ambitious, are you hoping for it to be the best selling Assassin's Creed game? Is that how I can read that commentary?

Question: Nick Dempsey - Barclays PLC - Analyst : Okay, thank you very much.

Question: Sebastian Patulea - Jefferies Financial Group, Inc. - Analyst : Hello, everyone, thanks for the presentation. I've got three questions and a follow-up, please. So recently, video game remakes have proven very successful for some of your peers and they are lower risk compared to new game titles. And based on numerous media articles, Ubisoft has a lot of remakes in the works. Can you please discuss what's the budget of a video game remake versus the initial game budget? Would it be, let's say, 50% of the initial budget or 10%, for example? And as a follow-up, can you please discuss how will you monetize these remakes? Will it be the city broke approach where you basically give it for free to gamers that have already bought the initial game? Or will it be the Sony Group approach where you'll also charge something, say, $10 even to those users that have purchased the initial game? Then, another question. The Ubisoft+ premium subscription is available on PC and Xbox. It was added on Xbox in April last year. Can you please discuss what's the holdup to added to PlayStation as well and whether that's even in the works. And finally, how do you see the addition of Call of Duty at the end of October and Game Pass impacting demand for XDefiant, if at all? Thank you very much.

Question: Sebastian Patulea - Jefferies Financial Group, Inc. - Analyst : Thank you very much, guys.

Question: George Brown - Deutsche Bank AG - Analyst : Yeah, good afternooon, guys. Thanks for taking my questions. I have two, if I may. Just firstly, how should we think about R&D spending going forward in the context of free-to-play? You said before that free-to-play has accounted for roughly 20% of your R&D but a lot of these free-to-play games have either been canceled or they've been delayed or they've underperformed like Hyper Scape for example, in recent years. I guess the question is, do you see scope to reduce free-to-play spending beyond fiscal year '25? And if so, does that mean you can reduce total R&D spending going forward? And then secondly, how should we think about your pipeline for next year and your competitiveness with the likes of Grand Theft Auto 6 releasing in 2025. Do you see any risk of crowding out similar to Fortnite? Or should we interpret this in another way? Thanks, guys.

Question: George Brown - Deutsche Bank AG - Analyst : Got it. Thank you, guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2024 / 4:15PM, UBIP.PA - Q1 2025 Ubisoft Entertainment SA Corporate Sales Call

Question: Ali Naqvi - HSBC Holdings PLC - Analyst : Hi, good evening, thanks for taking my questions. Just on your full year guidance, I appreciate there's been no change in the wording, but how should we think about the impact from the removal of Rainbow Six Mobile and Division Resurgence please? And then could you talk about preorders for both Outlaws and Shadows and how they compare to previous titles, please? And then finally, at the full year results, there was quite a better balance buildup from your partnership income related to the Activision Blizzard streaming rights. Has that started to unwind, i.e., have you been paid some or all of that money, please?

Question: Ali Naqvi - HSBC Holdings PLC - Analyst : Got it, thank you.

Question: Aleksander Peterc - Bernstein Private Wealth Management - Analyst : Yeah, thanks. My question has just been answered. It was pertaining to the pushout of Rainbow Six Mobile and Division Resurgence. Maybe if you could just help us understand if there's a delay. Does that mean that we should model a little bit more cautiously fiscal '26 if you say the initial contribution is small, but maybe the ramp-up then is pushed out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2024 / 4:15PM, UBIP.PA - Q1 2025 Ubisoft Entertainment SA Corporate Sales Call

Question: Aleksander Peterc - Bernstein Private Wealth Management - Analyst : Thank you very much.

Question: Adrien de Saint Hilaire - BofA Global Research - Analyst : Yes. Good evening, everyone, thanks for taking my questions. So you talked about the positive feedback you got from the community on Star Wars. I think there was a 10-minute preview video, which was released yesterday, which actually got some relatively mixed reviews on some of the graphics. So just wondering if the date for the release is fully confirmed or if you could adjust the date based on the feedback that you're getting on those previews? Secondly, can you disclose potentially the headcount level that you're in at the end of this quarter? And maybe thirdly, I'd be interested in your thoughts about broader industry trends. Do you think we've seen the worst in terms of market growth after a couple of years of digestion after COVID?

Question: Michael Hickey - The Benchmark Company, LLC - Analyst : Hi there, thanks, guys for listening in. Just two questions: first one, on XDefiant, you noted that you had 10 million players within those two weeks, which obviously is significant. You launched Season 1 in July 2, so you've got about another two-week window there. Can you help us size the level of your player base over the most recent two weeks compared to the 10 million? And then we're also curious if you have an estimate at least in terms of how many of the XDefiant, current XDefiant players or also Call of Duty players? The second question is on the dealys of Rainbow Six Mobile and The Division seems really early in their fiscal year to be delaying games, it sort of points to maybe some more structural issues with those games. So curious if that's the case, and I'm also wondering sort of whether or not you think these games, in fact, are commercially viable?