Ubisoft's experiments with free-to-play games and social networking haven't paid off yet.
With videogame companies like Zynga flourishing without ever releasing any physical products, you'd think it'd be easy for more traditional publishers to jump right into the mix. Not so, says Ubisoft CEO Yves Guillemot, who recently talked about how digital games aren't bringing in much revenue for the company.
In this case, "digital games" refers to free-to-play titles and those found on social networks. Guillemot specifically mentioned two of Ubisoft's titles: CSI: Crime City and The Settlers Online. CSI: Crime City is a Facebook game where players solve crimes in the role of an investigator from the popular television show. The Settlers Online is a free-to-play browser version of long-running real-time strategy series The Settlers.
According to Guillemot, despite the quality of these games they're not earning enough money yet. CSI: Crime City has an average of 2 million monthly users, which the company is pleased with, but Guillemot thinks that more investment will be needed for digital games to truly bear fruit. Part of that investment includes launching them worldwide, as it plans to do with Settlers Online by bringing it to new markets in China and Russia.
Even Scott Pilgrim vs. The World, which was one of the biggest selling games on the PlayStation Network in the second half of 2010 in addition to XBLA sales, doesn't appear to be profitable enough for Guillemot. He says the cost of investment for many of these digital games may be higher than their returns.
However, Ubisoft is still positive about where this segment of the market is going, and plans to launch a new "digital initiative" in the next fiscal year that will improve on what has been done already. Guillemot's words are surprising, because you're used to hearing about how digital markets are earning cash hand-over-fist for publishers all over the world.