# Ubisoft vows to get back to operating margin above 20% in medium term
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-17
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Ubisoft aims for 20%+ operating margin on focus shift to major franchises and live services
Meta Description: French game producer shifts focus to major franchises, live service games to boost profitability. CFO eyes margin recovery in coming years despite recent
URL: https://financedigest.com/ubisoft-vows-to-get-back-to-operating-margin-above-20-in-medium-termhtml

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By Enrico Sciacovelli

(Reuters) -French video game producer Ubisoft said it would reach operating margin above 20% in the medium term, as it aims to shift its focus to major franchises and “long-lasting” live service games.

The family-run firm has been dogged by game delays in recent years and last month warned of the biggest operating loss in its history, while vowing to focus on blockbuster titles after scrapping seven projects since July.

We anticipate that in the coming years, behind a very rich lineup, we progressively get back to above 20% operating margin in the medium term,” Chief Financial [Officer Frederick Duguet said in a call](https://www.financedigest.com/international-law-firm-calls-in-viato-connect-uk-and-us-offices.html "INTERNATIONAL LAW FIRM CALLS IN VIATO CONNECT UK AND US OFFICES") with analysts.

Last [year Ubisoft achieved an operating margin](https://www.financedigest.com/inpost-sees-better-margin-in-poland-plans-no-job-cuts-this-year.html "InPost sees better margin in Poland, plans no job cuts this year") of 19.1%, compared to a 21.1% in 2020-21, as the pandemic kept people home and boosted sales.

The [gaming market](https://www.financedigest.com/how-businesses-can-effectively-pivot-marketing-game-plans-for-christmas-2020.html "How businesses can effectively pivot marketing game plans for Christmas 2020") is estimated to have shrunk 4.3% in 2022, according to market research firm Newzoo.

The company stuck to January’s forecast for an operating loss of around 500 [million euros](https://www.financedigest.com/hellofresh-sees-2023-core-profit-of-460-540-million-euros.html "HelloFresh sees 2023 core profit of 460-540 million euros") in its 2022-23 year.

[Ubisoft shares](https://www.financedigest.com/ubisoft-shares-slump-20-after-french-video-game-maker-warns-on-revenue.html "Ubisoft shares slump 20% after French video game maker warns on revenue") are down roughly 25% year-to-date, on top of an almost 40% drop in 2022.

The maker of the Assassin’s Creed franchise reported on Thursday net bookings of 726.9 [million euros](https://www.financedigest.com/amazon-grants-1-5-million-euros-to-dutch-seaweed-farm-project.html "Amazon grants 1.5 million euros to Dutch seaweed farm project") ($776.2 million) in its third quarter to the end of December, in line with its forecast.

That was a drop of 2.6% year-on-year, however, with Ubisoft citing the [impact of the macro-economic environment on the video game market and the company’s](https://www.financedigest.com/the-severe-impact-of-downtime-on-companies-bottom-lines.html "The severe impact of downtime on companies’ bottom lines") performance.

Ubisoft said its lineup for the [next fiscal year](https://www.financedigest.com/eu-could-face-gas-shortage-next-year-iea-warns.html "EU could face gas shortage next year, IEA warns") would include Skull & Bones – first revealed in 2017 – Assassin’s Creed Mirage, and Avatar: Frontiers of Pandora, in addition to mobile entries in the Rainbow Six and The Division series.

($1 = 0.9365 euros)

(Reporting by Enrico Sciacovelli, Editing by Hugh Lawson, Kirsten Donovan and Bill Berkrot)


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