Q1 20/21

Jul 22, 2020

Earnings release

Good day, and welcome to the Q1 FY 'twenty one Sales Call. At this time, I would like to turn the conference over to Mr. Guillemot. Please go ahead, sir. Welcome, everyone, and thank you for joining the call today. While our current performance and the prospects for our upcoming games are stronger than they have ever been, I want to begin our remarks today by addressing directly the very serious challenges that we have recently been going through internally. While additional investigation are still ongoing, I want first to make it clear that the great majority of Ubisoft employees, studios, businesses and divisions behave in a respectful manner. However, everyone should feel welcome, respected and safe without exception. Ubisoft teams, I am committed to implementing profound changes across the company to improve and strengthen our workplace culture. We have already acted quickly making the necessary decisions and taking strong actions. I would like to highlight some of the changes we have already made. 1st, the external partner in charge of managing Wipfli, our anonymous reporting tool, will analyze and evaluate the information to recommend the appropriate actions to be taken against offenders. It will also provide regular direct reports on allegations to our Board of Directors. 2nd, all employees will undergo comprehensive and mandatory training on harassment matters. And we have asked our teams to participate in an overhaul of our code of conduct. We will ensure this new code of conduct is read, understood and signed by 100% of employees. 3rd, we will be adding a new performance criterion to the compensation schemes of all team leaders. Using these new evaluation tools, a portion of their bonuses will be tied to their ability to create a positive and inclusive environment. 4th, these recent events highlight that bringing more diversity is critical for us. We'll be recruiting 3 new VPs to join the editorial team with the priority given to candidates coming from diverse background. We'll be recruiting a Head of Diversity and Inclusion to create a more inclusive culture. And as a reminder, our Board Nomination, Compensation and Governance Committee, which is fully independent, has decided before this situation started to add a new diversity performance criterion to my own variable remuneration. It was approved by our shareholders during the Annual General Meeting held on July the second. Finally, the decisions we have taken for our editorial team and Canadian studios are meaningful. Today, we rely on a strong creative vision, on a deep bench of talents and on a strong production organization. We now have the opportunity to review the way our creative teams collaborate and ensure we can both reform our practices and continue to deliver on our ambitious production plans. Transforming the culture of Ubisoft will require time and focus, but these actions and many more that are currently underway clearly demonstrate all the decisive actions we are taking. I now hand over the call to Frederic. Frederic? Thank you, Yves, and hello, everybody. As I mentioned last quarter, for the sake of comparability, I will base all my comments today before the new mobile reclassification rule to ensure a like for like comparison with fiscal 2020. This reclassification amounted to €11,000,000 in Q1. 1st and very impressively, our quarter was bigger in terms of unique users, session days and play time than any given quarter in Ubisoft history. The number of unique players reached 69,000,000 and MAUs reached 40,000,000 across consoles and PC. As a consequence, net bookings were very strong and reached record levels for our Q1 at €399,000,000 up 27% year on year and above our target of approximately €324,000,000 before reclassification. This year on year growth is remarkable as Q1 last year benefited from the launch of ANNO 1800 and the recent release of the Division 2. It demonstrates how our business has become much more recurring and resilient. Similarly to the prior quarter, the year on year increase and outperformance mostly reflects both organic strengths and increased engagement related to confinement. This dynamic was felt across the board with strong performance from our full portfolio. We continue to reach a very wide audience, thanks to the strong diversity of our games ranging from Assassin's Creed and Rainbow 6 to Just Dance, Mario Rabbits and Rollana. We also saw great trends on digital and PRI. Focusing specifically on the impact from lockdown, While April May were exceptionally strong, June July global trends are getting closer to January February. This reflects the impact of the end of lockdown in most European countries, while the U. S. Market continues to show solid year on year progression. However, overall trends are still growing year on year even if less meaningfully. As such, it is still too early to have a clear view on what will be the new normalized trends, and we remain cautious today in our assumptions. Our back catalog represented 97% of our revenues and was up 42% to €387,000,000 We benefited from our deep and diversified bench of strong franchises. Despite strong competition, Rainbow Six Siege net bookings saw very solid year on year growth of over 30%, both driven by strong acquisition and PRI. The game also delivered sequential growth. This is remarkable as calendar Q1 is generally a huge quarter for the game with the major impact from the 6 invitational. Engagement was very robust during the quarter and continued to deliver year on year growth in June. Following many strong quarters, the Assassin's Creed franchise delivered an amazing performance in Q1, spurred notably by the record reveal of Assassin's Creed Valhalla. Net bookings for the franchise were up over 60% year on year, an outstanding achievement considering the last Assassin's Creed was released over a year and a half ago. Such levels of recurring revenues is quite a revolution for a brand like Assassin's Creed and highlights the amazing work done by our teams over the past 5 years to transform it. 2 additional impressive metrics: first, the fact net bookings were also up over 50% sequentially and second, that TRI in the quarter for ODC was 8 times higher than Origins in Q1 last year. And finally, after an already very solid first 6 months, Just Dance had a huge quarter, up more than 6 fold year on year. The brand continues to be a fan's favorite and is definitely benefiting from the trends of Switch and its increasingly large audience. Total digital net bookings reached €345,000,000 up 18% and represented 86% of our total net bookings, slightly lower than last year due to our strong performance on Switch this quarter. Talking about Switch, our catalog of games for the platform grew more than 2.5 times versus last year. PRI came out significantly stronger than expected. It was up 25 percent to €188,000,000 representing 47% of our total net bookings. Excluding mobile, TRY was up 16%. This is a very strong performance when considering last year Q1 Division 2 season pass. This quarter's strong mobile growth was led by last year's acquisitions and includes €11,000,000 related to the new classification. Looking now at Q2, we expect net bookings at around €290,000,000 including an estimated €10,000,000 from the mobile reclassification. This will represent a 16% decrease versus last year. As a reminder, Q2 last year benefited materially from early physical shipments linked to the release of goth recon breakpoints. Q2 will notably see the releases of Tom Clancy's Elite Squad and the full launch of Hyperscape across consoles and PC. It will also see the release of Brawlhalla on mobile after a very strong Q1 for the games for the game on consoles and PC with revenues 2 times higher than last year. Moving on to fiscal 2021. We are confirming the targets set out during the full year results with a range of between €2,650,000,000 €2,650,000,000 for net bookings. Non IFRS operating income is expected between €400,000,000 €600,000,000 The confirmation of our targets reflects our current momentum, the excellent health of our business and the great KPIs from the 1st Ubisoft Forward event, but also the potential external impacts from the COVID-nineteen crisis that we mentioned mid May. It is worth noting that the vast majority of our developers are still working from home. Looking at our lineup, the 5 AAAs are now revealed. The Ubisoft Forward event outperformed versus our expectations. The live event generated historic viewership with record high peak concurrent views and average view time above last year levels on all platforms and channels. Interestingly, the biggest countries in terms of traffic on our platforms were in no particular order, the U. S, Brazil and China. After a spectacular reveal in April, which sets new records, Assassin's Creed's Valhalla gameplay reveal received a strong reception with around 500 influencers and journalists playing the game for more than 3 hours. We are confident it will be one of the strongest performers at the end of the year. As Game Informer wrote, Ubisoft has refined its formula and crafted another massive sandbox that looks to deliver on the Viking fantasy. The game will be released on November 17. We have also been humbled by players' reception to the Far Cry 6 reveal, which came after the very successful reveals of Assassin's Creed Valhalla and Hyperscape earlier this year. The cinematic trailer, which acclaimed actor Giancarlo Esposito playing as the villain strongly contributed to this enthusiasm. As IGN puts it, that delivery had me hooked from the first words he spoke all the way through. As soon as he pulls the pin on in that grenade, you're just hanging on every word. Park Cross 6 will be released on February 18. We had a successful hands on event for Watchdog Legion. The Play As Anyone feature, allowing players to recruit and play as any character from the world, creates a lot of depth in the player experience and has intrigued media and fans. GameSpot called the play as anyone system, a fascinating take on a class based system. It offers a variety of play styles and it's pretty damn impressive how well it works. The game will be released on October 29. And lastly, Hyperscape, our new Battle Royale game benefited from a very smooth technical test and was ranked number 1 on Twitch on its reveal day. Reception among the community was very solid, with players praising its strong differentiating aspects, notably its verticality, its fast paced gameplay and its deep social integration on Twitch. The launch of the open beta announced during Ubisoft Forward marks the next step before the global release of the game on PC, Xbox 1 and PS4 this summer. For my conclusion, I would like to talk about ESG, which for many years has been a super important driver for the company and for our teams. Today, I will focus specifically on diversity in our games. From jail in Beyond Good and Evil 20 years ago, the Princess Aurora in Child of Lights, Altair in the 1st Assassin's Creed, Adewell in Black Flag, Bayek in Origins, Cassandra in Odyssey and Avor in Halala, Marcus Halloween in Watch Dogs 2 or iconic Rainbow Six Siege operators like Beloved Ash or the recently introduced operator, Melusi from South Africa, we have represented diversity in a meaningful way in our games. And those titles are among our biggest performers or among our most iconic games. Players can then make their own choices. While around 1 third of players like Cassandra in Assassin's Creed RDC, Ash is the most selected attacking operator in Rainbow Six Siege. The diversity I mentioned ranges from gender to ethnic diversity and also includes strong LGBTQ plus characters as well as neurodiversity with the representation of autism. As you can expect from our team's commitment and passion, Ubisoft will continue to lead the industry on diversity representation in our games in the future. Finally, we are proud to have been awarded best learning game for the 2nd year in a row at the Games for Change Awards. Last year, it was for the positive social impact of the Discovery Tour. And this year, it is for rabbits coding, which teaches kids the basis of coding in a fun way. Before I hand over the call back to Yves, please note that we will have another exciting Ubisoft Forward event in September, and we can't wait to show you more. Thank you, Frederic. An essential takeaway from the past quarter is the fact that our teams performed remarkably. They performed strongly on the activity side with across the board outperformance from our catalog and live services. They performed strongly as well on the announcement side. They delivered powerful reveals for Assassin's Creed Valhalla, Hyperscape and Far Cry 6 and a strong comeback for Watchdog Legend, which is fully benefiting from the additional development time. Our 2 other AAA games, Golden Monster and Rainbow Six Quarantine, are also benefiting from this extra type. It is clear that the difficult decision we took last year has given our teams the means to deliver their full vision, and this is greatly benefiting the overall quality of their games and working conditions. We have a lot to further showcase in the coming months. This demonstrates that we are well on track to return to a path of great execution. As a matter of fact, we want our execution to be even stronger than before. We believe that our game's performance over the past 6 months are clear indications of where we are heading. As a conclusion, I would like to emphasize that at Ubisoft, we invest to create significant long term value for our teams, players and shareholders. We are committed to building a sustainable and inclusive business. We developed a high value direct relation with our communities and strongly expanding Life Services with over lasting gain. We create solid long term asset with IPs, technologies and platform ownership and a deep portfolio of amazing franchises. We can rely on a deep punch of amazing talents at every level of the organization from the business, production, creation and support divisions. And with the 2nd production and creative powerhouse of the industry, we are ideally placed to capture the biggest opportunities as the industry's prospects are meaningful and plentiful. Finally, as I said earlier, we need to make sure that moving forward, we are providing the best conditions for the development of our people. As with every past challenges, we believe the serious situation we are currently facing will allow us to progress and become a better company. We are now ready to take your questions. Thank you. We will now take our first question from Ryan Gee of Bank of America. Please go ahead. Yes. Hi, good morning. Thanks for taking the question. I guess, good evening for you guys. Thank you. So, Frederic, you mentioned that Europe, it's returning to normal in terms of demand. Can you update us on the worker side for your employees over there in Paris? I think last quarter you said you were still a couple of weeks behind in terms of productivity and production delays. Are you guys back on track now? And related to that, we still haven't heard anything regarding or not much regarding 2 of the 5 AAA titles for fiscal 2021. I think Gods and Monsters and Quarantine are still TBD. Is this something we can still expect? Any update on those two titles? Yes, sure. Thank you, Ryan. Yes, it's something that we are monitoring carefully. We still have a vast majority of our developers working from home as we need to follow strict protocols, putting the safety of our players first in many countries. We have the high number of employees going back in the offices in some areas in China or France, of course. But across the world, we still have a vast majority of workers in the working from home. So we think that, like we said back in May, we have put in place the right solutions. It's true to say that we had lost a few weeks of productivity. So far, we're happy with the progress. This is still something that are monitoring on a weekly basis, but we're happy with the progress across the board. And as far as the two titles you mentioned, Golden Monsters and Quarantine, they are doing well. Actually, as Yves mentioned just before, they are benefiting from the extra time we gave them, and we're happy with the progress. Today, we continue monitoring the situation closely, including for the 2 Q4 titles, as we said, that are potentially for one of them at risk to postpone to fiscal 2022. But as we said repeatedly, if we were to take that decision to postpone a game, we will do it for the long term value of the game. Okay. And if I can just fit in another one, HyperScape was a surprise inclusion for fiscal 2021. Can you talk about sort of the player activity in the beta, both the closed and the open beta and what that sort of indicates for potential contribution to PRI once it does launch later this summer? Yes. So we had said before that we wanted to accelerate our investment in free to play. And I think HyperScape is a very good illustration of our first entry in that fast growing segment. We've been very impressed with the impact of the reveal on day 1. We were number 1 on Twitch through the technical test that went very smoothly. And we are still in early phase of the beta, so we are preparing ourselves for a big launch later in the summer across console and PC. And as far as we can see, the first reveal put it on a strong trajectory in the player's mind. So we think that we have a solid and strongly differentiated game in this genre that bodes well for this game. Great. Thank you, guys. Thank you. Thank you, Ryan. And we will now take our next question from Robert Berg of Berenberg. A couple of questions from me. And the first is on the allegations. Obviously, very important issue, very concerning, but glad to see you're taking these allegations very seriously and hope that, that does have a material impact. But with regards to the upcoming releases, a very busy year, as you've reminded us numerous times, Could you give us a sense of the impact, if any, on the day to day work of employees? Can the allegations cause distraction or the management changes have any impact on the timing or quality of any upcoming content? And I'll ask the other question after that just to stay confusing. Yes. What we as you say, we indeed take the allegations seriously, and I think it was important that we acted fast. And from day 1, Eve has to personally the drive to look at the situation carefully indeed a very strong action plan to really improve the company for the best. When we look at the daily operations, we see that our teams are really focused on delivering their games. They want our games to be massive successes. And we've seen that the very good reception from players at the Ubisoft Forward has given them a very high level of energy. So we see that we are relying on very strong teams, very dedicated and passionate teams. And we have we see that these teams really want their games to be great successes. Okay. And then the second is on the guidance. Q2, down sequentially. Could you give us a sense of how much of this is the moderating shelter at home that you mentioned versus how much is prudence on economic uncertainty? Just a sense. And you mentioned the U. S. Is still seeing more of a positive impact from shelter at home than rest of world and clearly 50% of your revenues is U. S. So what are you assuming happens to the U. S. Growth? And the final point on the guidance, if I can. How much, if anything, are you factoring in for the free to play launches this quarter, Hypro Escape, Brawlhalla mobile and the Elite Squad mobile game? Thanks. Yes. So in terms of impact of the confinement on the different geographies, so as you know, of course, the Asia has come back to work for quite some time. More recently, there was a lift in the restrictions in Europe, which we saw in June. We still see that North America has an impact in terms of confinement. In our guidance, we have not assumed any confinement beyond July. So we will be prudent on that front. In terms of the way we factor free to play in our guidance, today, it's still a new business model for us. So we think we have solid games in our hands, but we want to be prudent and reasonable in our guidance. It's important when you look at the guidance to keep in mind that, as I said earlier, Q2 last year was materially impacted by the physical shipments of cost record breakpoint. Okay. Many thanks guys. You're welcome. And we'll now take our next question from Nicolas Langley of Exane BNP. Please go ahead. Yes. Hello, everyone. Three questions for me. The first one on pricing. So Tech 2 recently announced that NBA 2 ks 21 for next gen will be sold with $10 premium compared to current gen. Just curious to have your take on this announcement and whatever you plan to follow this move with your upcoming titles on next gen console. And second question on the back catalog. I think at the beginning of the year, you were looking at a slight decline back catalog. Now given the strong Q1, is it still the case? And finally, on mobile, if we take into account the accounting adjustment, the M and A contribution and the new game release, what sort of net booking you are expecting for the full year? Thanks. Thank you for your questions. For the Christmas games, we plan to come with the same price than previous generation of consoles, and that's what we focus on at the moment. Hello, Nicolas. Yes, on the back catalog, it's true that we said in May that we count on the slight decline slight decline versus last year for our back catalog. It's true to say that we've been significantly over performing in the Q1. So at this stage, it gives us greater visibility and it continues to contribute to improving the risk profile of the year. So far, we haven't adjusted our assumption because it's still early. We are still early in the year. On mobile, it's true that with the combination of goods based business that was nicely performing in the Q1, a strong contribution of the acquisitions and the launches that we estimate this year. We, of course, rely on the strong growth on mobile this year. Okay. Okay. Thank you. And we'll now take our next question from Omar Sheikh of Morgan Stanley. Please go ahead. Good evening, everyone. I have three questions if I could. I want to Eve perhaps. Could you maybe talk a little bit about how important sales to Asqueville was to the development process? And whether or not you'd have you expect any disruption to the development pipeline, not just in this year, but in sort of forthcoming years? That would be useful to hear your comments on that. And then secondly, on Hyprascape, you mentioned the very strong initial reaction on Twitch to the game. I just I'm sure you noticed that there the engagement on Twitch after the 1st day went down quite a bit after the technical test. So I wonder whether you could just comment a little bit on that and what you would sort of interpret that whether we should interpret anything into that decline in Twitch engagement? That's the second question. And then lastly, on the last call, you expressed some confidence that you were, I think, tracking towards the original target of releasing 5 AAA games during fiscal 2021. I just wondered whether you could say whether your confidence in tracking towards that 5 game release number has changed at all since last quarter? Thank you. Thank you for your questions. So at Ubisoft, we have a strong vision on all the games that are underway at the moment. And what is important to consider is we have a deep bunch of senior talented creative people in the company. We have 18,000 people in the company and a lot of creative minds. So I am now taking directly the role of CMO, and I am really taking care of all those games that are underway. You probably know that I was already following all those games carefully. And I have a strong team to follow all the games that are created. And we are going to actually take advantage of the evolution of the company to make sure there's more communication and more investment from all local teams into the production of the games and the way they are followed. On hyperscape, yes, as I said, we are still early in the phase of the launch. The big launch has not come yet. We're preparing ourselves for a big launch later in the summer across all platforms. So far, when we look at the game and the way the players value it, it's really coming well because they value the strong element of differentiation. So we think that we are here for the long term with a very solid gain. In terms of the release schedule, yes, we confirm that we are well on track to deliver these 5 games in fiscal 2021. As I said earlier, we still focus carefully on the weekly follow-up on the productivity progress in the context of a high proportion of our people working from home. And it's important that we keep in mind that the solutions that we put in place are working well. We have prioritized the critical tasks that are difficult to be done at home when prioritizing the people that came back to the office. So that's working well. We're happy with our progress there. We're also carefully looking and tracking the productivity we have on the game that come in fiscal 2022 because, of course, we also have the same proportion of people working from home. So it's coming along well, but also something that we are focusing on and monitoring very carefully. On hyperscape, yes, on hyperscape, you have also to consider that we are going to make a big launch when it comes when we launch it on PC and console this summer. Okay. That's very clear. Thank you. And just one final follow-up, if I may, for Frederic. Do you actually have a number for the physical sales that you generated from breakpoint in Q2 of last year? [SPEAKER JEAN FRANCOIS XAVIER BOUVIGNIES:] It was material. That's what I can say with you. It was really a material number. Merci, welcome. Thank you, Omar. And we'll now take our next question from Mike Hickey of The Benchmark Company. Please go ahead. Hey, Neve, Frederic. Hope you guys are good. Thanks for taking my question. Congrats on the quarter of success there. We have some new consoles coming out this holiday and it's been an interesting setup for a while. I think we're worried about supply disruption and we're hearing that maybe supply was going to be it's coming, but it's a little bit less. And now we're hearing maybe we're going to get 2x the amount we thought we were going to get. So obviously, it looks like next gen is going to be a good setup for you here, especially with all the new gains you have coming to market. So I was hoping you could just give us a little bit of your view of the opportunity you see this holiday with maybe a lot more supply of consoles coming from the market? Thank you. Thank you for your question. In fact, we are very excited by the fact that there are new consoles at the end of the year. It is each time putting a boost on the industry. And the fact that they are able to create a number of machines they want to create is a very positive element for the industry. So we are going to be there ready with lots of great games for the launch of those consoles and so we are very excited by that. Great. Thanks. I guess, after you've forwarded that, it looked like some of the reviews on WatchDOGS was, call it, mixed. We had a little bit of pushback, I think, compared at least to Valhalla and some of the other games like Far Cry that were decidedly positive. Can you speak to some of the pushback on Watch Dogs and if you changed your expectations or is there anything else you can do for that game? Thank you. Yes. On Watchdogs, we were actually very happy with the reception. The people that were able to play the players, anyone really loved it. And what we know is when they will be able to play the full game, they will be extremely happy with the story side. So altogether, Watch Dogs is coming along extremely well, we think. And it's going to come the 29th October and then it will be relaunched by with the launch of the new console. So it's we have big expectations for Watchdog. Yes. From the KPIs, the vast majority of the feedback has been very positive. And I should add to that that the London setting has been also very well received. Okay. Last question for me guys. Can you reiterate your PRI guide for the year? And if that's changed or not, I think there's a percentage in 2019 before, but I'm curious if that's still the case. And how much of that to Zoom growth is from new games and live services versus your bad catalog? Thank you. Yes. So we yes, we reiterate our PRI guidance that in percentage should be higher than the level of fiscal 2019, so above 32%. And so that should follow a strong growth year on year. It's what we see that baccatella games and live services are expanding very well, so they will contribute to that growth. But of course, the fact that we are coming with 5 AAA games as well as free to play games will also contribute very nicely to this strong growth. Thanks guys. Best of luck. You're welcome. And we'll now take our next question from Doug Creutz of Cowen. Please go ahead. You guys emphasized that a big part of your success has been the growth of your catalog business. I'm just wondering how you're thinking about that in context of the console transition? Do you think you'll be able to transition that catalog business well over to the new consoles? Or will there be a bit of a reset period as you build up a library of next gen games? Thanks. Yes. We will make sure all that catalog can play on the next consoles, and we think it will actually boost the sales of those games on the longer end. Okay. Thank you. Thank you. We'll now take our next question from Matthew Walker of Credit Suisse. Please go ahead. Thanks a lot and good evening everyone. So just a question for Yi, first of all. It's great that you're addressing all of these different issues with workplace culture. Can you just reassure us that basically you're able to take on so many different things at this time and you're not becoming sort of overloaded with activities, having to take on the mantle of the Chief Creative guy? And can you actually give us a few names of people who've taken over and stepped up to the plate in terms of creativity and management so that we can be reassured that this issue around keeping the games on track is being gripped? Because obviously, you've got 18,000 employees, but we need to know who are these people who are stepping up to take over responsibility. And then the second question is on the crowding aspect in Q4 in terms of the releases. It sounds like Valhalla's had a very strong reception. So I guess that's not an issue going up against Cyberpunk, but maybe you can speak to some of the other releases and say if you're worried about the crowding aspect, particularly in this holiday season. Thank you. Yes. Thank you for your questions. In fact, what we started at the beginning of the year was to increase the number of VPs in the Edito organization, and we have done that on 2 of the teams, and that is really bringing fruits to how we follow our games. And so I have really a good team that now is following all the games that we are developing. So we will continue to recruit from our studios and from the outside, but mostly from our studios, people that are have been working on different games so that we can have the necessary know how and understanding of how to give advice and help the teams in our studios. And at the moment, I feel we have a good team to follow the games that we have. And I see that we will be able to recruit from our teams all the people that I think can really bring and help to continue to follow and also to company. In terms of the Q4 hello, Matt. In terms of Q4, yes, we are very happy with the visibility we have on the quality that we can expect on Assassin's Creed and Watch Dogs. And we know that each time we come with great quality, we do very well. Assassin's Creed has a unique fantasy in the landscape and the Viking one is resonating very well. And we think that with the Bryte through we are bringing with Wild Dogs, we also have a very unique positioning. Keeping in mind that we are coming in a quarter of very deep consumption with Thanksgiving and Christmas. And of course, again, as Yves mentioned, we will be strongly supported by the excitement around the next generation of consoles. So all this bodes well for a strong consumption in this quarter for our gains. Okay. Thank you. Thank you. We'll take our next question from Ken Rimp of Jefferies. Please go ahead. Hello, gentlemen. If I could ask to begin with a couple of questions about this year and next year. Firstly, this year, just to try and understand how things have developed today versus when you gave your guidance in the middle of May. At the time, for instance, you mentioned that you were assuming that lockdown basically ends at the end of June, and you're now saying the end of July. So arguably, we've had some better news. As you said, the possibility of a game delay remains a possibility. So perhaps no change there. The other thing you were factoring in, particularly in the lower end of the guidance, was the unknown impact of recession, if you like. So have any of those things changed? And I guess you were factoring Hyper Escape because you knew about its costs. And as you say, you were being modest about expectations. But has any it would seem to me that we've had a little bit of news at stage than you might have been factoring in, in the middle of May. Yes. So it's in terms of lockdown impact, yes, we said that today we factor that lockdown might continue supporting the North American business until end of July, while in the rest of the geographies, we don't see any potential impact in our assumptions so far. Yes, as you say, when we look at where we are versus back in May, we benefit from a stronger visibility from the further good visibility and better visibility from back catalog. We think it's still too early to change our assumption on that side, but of course it's there for the better. You're right, we had factored hyperscape from the beginning, and we have reasonable ambition on our free to play games this year. In terms of what we had factored in beyond the prudence relative to our employees working from home in terms of productivity, we also said that we need to be careful about the impact of the crisis on our business partners. So, so far so good, but we're coming in a period where we need a strong support from our retailers when we launch our big games. So that's something we'd be looking at. As I said, so far so good. We see that there has been some good resilience on that side so far. In terms of general consumption, we have not seen any negative impact so far, but that's also something that we're looking at. And just to come back to the work from home that yes, sorry. No, please go ahead. I'll come back to the work from home that we spoke about earlier. What is we have challenges coming with work from home, but we have also lots of opportunities. And the fact that we are able to have people act and work on different projects all over the world is something that is also helping tremendously the different games that we are creating and it's also helping our editorial team as well. Okay. Thank you. I'm going to ask one question about the future and then a question for Eve personally. The question about the future was just that we've heard some reports of further changes to Skull and Bones. I just wondered if there was anything to comment on that. But then I wanted to ask a question of Eve as a Founder and CEO of the company and more important people than me will ask. But in a sense, I could present the question regarding what's happened recently as kind of 3 options. Either as CEO, he didn't know this was happening or you didn't know this was happening, which is not great, or you perhaps didn't know enough and should have asked more, maybe that's the answer, or you knew, which of course would not be good. Now those are my possibilities. You may answer the question differently, but I'd like to ask what would be your answer to the question about your responsibility as CEO? And as I say, I'm asking the question, but probably more important people than me will ask it. Yes. Thank you for your question. In fact, each time we have been made aware of misconduct, we made actually tough decisions and made sure that those decisions had a clear and positive impact. So that's very important. It has now become clear that certain individuals betrayed the trust I placed in them and didn't live up to Ubisoft shared values. So I have never compromised on my core values analytics and never will. I will continue to run and transform Ubisoft to face today's and tomorrow challenges. And we will now take our next question from Tom Singlehughes of Citi. Please go ahead. Good evening. Tom here from Citi. Actually just one question. It's about the launches. I mean, the 2 titles you haven't given launch date for, BOTS and Monsters and I guess Rainbow 6: Quarantine. I mean, they're both titles that would have come out last year. So it's interesting. And I see the point about more time being taken to sort of perfect the game. But I suppose the question is, 1, just qualitatively, how fundamental has the overhaul of those games been given they were potentially meant to be launched earlier this year and they probably won't be launched till next? That's the first bit. And then the second bit is leaving aside the risk of them getting delayed. Is there just a higher risk that they won't succeed given there's potentially been a much more fundamental overhaul of how they look or what they deliver? Thank you. Yes. So what is important to have in mind is that when we decided to postpone these games, we really wanted to take the most of the extra time and that's what the teams have been benefiting from. So it's about really providing even more depth to the gameplay, strengthening the key angles the creative and artistic vision and also making sure that we further polish, refine, further balance the game so that learning from last year become with great player experience from launch. So I think the team are very excited with what they've been achieving so far. These are games that, as we said, are in Polish time now. And it's clear that they are on track to be there in the fiscal year. And we are happy to show more, of course, in the next pulse points coming in the next month. And we'll take our next question from Drew Crum of Stifel. Please go ahead. Okay, thanks. Good evening, gentlemen. On Hyper Scape, can you discuss the content roadmap for the game in terms of the cadence or frequency around the add on content? And then separately, I didn't hear you address Uplay Plus. Can you talk about its performance during the quarter under the stay at home mandate? Thanks. So on Hyperscape, what we have to consider is that we have a very good team, and so they are going to provide a really high fair of content on a regular basis. They really plan to compete with the best there. In terms of uPlay plus it's we had a nice uplift benefiting from the confinement. What is clear about Uplay plus is that we are here for the long term and we expect that coming from the big releases that we have this year with massive content coming, Uplay plus will strongly benefit from this content coming. Okay. Thanks. And we'll take our next question from Charles Scoti of Kepler. Please go ahead. Yes. Hello, good evening. I've got three questions. Actually, the first one, it seems that the audience on Rambus Exceed has come back to pre lockdown level. Can you tell us if you are experiencing the same trend across the board? The second question, there was a few articles mentioning a complete reboot of Skull and Bones and God and Monsters that could even change name. Can you give us a little bit more color on this? And finally, it seems also that you have canceled the closed beta of Rudolf champions. When can we expect these games to be released? And have you changed your plan and gameplay on this game? Thank you. On Rainbow Six Siege, it's this game is really in better shape than ever. We've had a stellar quarter, we must say. Very strong growth, not only on the engagement side, but also on the acquisition side, which bodes well for the rest of the year given the retention that we have on this game. In June, we continued to grow across platform less meaningfully, but we continue to grow across platforms and we also continue to grow in terms of engagements over the 1st 3 weeks of July. So we think this game is really in a very good position. We see the team that has a strong opportunity to further enhance and increase the value of the battle pass for the players. So that should provide a strong support in terms of engagement for Rainbow for the rest of the year. For the 2 games, God and Monster and Skull and Bones, they are well underway, and they are performing very well. So we are very happy with the way it's going on those two games. On Roller Champions, we are taking some time refactoring some of the elements, thanks to the beta we did earlier. And we are making also lots of good progress on that game that we expect will be a very good one. Thank you very much. Thank you. And our next question comes from Brian Fitzgerald of Wells Fargo. Please go ahead. Please go ahead, sir. Your line is open. Hello? Yes, can you hear me? Yes, it's Brian. Thanks, guys. Sorry about that. Current consoles focus on selling a place to build communities with things like exclusives, etcetera. However, with the success of cross play, Fortnite, Rocket League, those such things, the trend is pushing towards player ubiquity across platforms. Will cloud gaming, in your point of view, accelerate this similar to what happened with physical to digital? How does Uplay figure in there? And then any comment on what we're seeing with the mobile app stores being scrutinized Apple for these kind of egregious or higher take rates? Thanks. Yes. So in terms of cross play, cross platforms, including mobile, PC and console. We're happy to provide more and more of this cross play experiences on free to play in the coming years and starting this year. It's true that we expect that streaming in the medium to longer term will allow players to enjoy AAA experiences on mobile as well. But it will, of course, takes time before the 5 gs gives full speed on that. But that's what we expect in the medium to longer term. It's a great opportunity for the industry. It's taking a little bit of time, but we feel that the next generation of games will be played on all screens, and we have good teams working on taking advantage of those technologies. Thanks, guys. And one quick follow-up on the catalog because you guys highlighted it of particular performance and strength. To what degree are you seeing during the pandemic lapsed players come back into the platforms, step back into the games or maybe step back in their catalog favorites? Is that a trend you're seeing with the pandemic? And as we go forward, are you seeing it being more sticky as we reopen the economies? During the confinement, what we observed is that we got a strong contribution in terms of audience and engagements. What has been remarkable during this period is that we had a combination of recruiting a significant portion of new players, but also we had players, as you say, lapsed players coming back after 3 or 6 months into our games. And despite the fact that the audience was significantly higher, the engagement per player on average actually increased as well. And the revenue per session didn't go down. So that's why it has been very favorable across console and PC. As we said earlier in the call, it's still too early to anticipate the portion of these extra players and large players that will stay for a longer period of time with us beyond the confinement. But what we see is that because we have such a wide and diversified catalog, we've taken the opportunity to see players circulating between our games and we'll look at this opportunity moving forward. And what is interesting is that many of the games that were less played before continue to be played a lot after confinement. So the rediscovery of some of our games was important for many players and for many families especially. Thanks Yves. Thanks Frederic. Appreciate it. Thank you. Thank you, Brian. And we'll take our next question from Michael Ng of Goldman Sachs. Please go ahead. Great. Thank you very much for the question. I was wondering if you could expand on your comments about engagement in June July going back to January February levels in some cases because of the end of lockdown in some European countries. Are you seeing a clear correlation in ending shelter in place measures and declining video game engagement? And could you just talk a little bit about how that informs your expectations for U. S. Engagement and whether or not there are any differences that may cause that behavior to be different than what we're seeing in Europe? Yes. So it's true that we had we do see engagement level closer to January, February, keeping in mind that January February were very strong months for us. It's true to say that we continue to see a strong engagement in the U. S, strongly growing versus last year. It's still difficult to isolate the latest impacts because over the 1st week of July, we've seen still a strong growth in terms of engagement across the board versus last year. And we definitely benefit from the strength of our catalog. So it's not that easy to isolate the impact on confinement even if we see U. S. Ahead of the other geographies. Over July, we've seen that we got the benefit of our growing free to play business, not only hyperscale but also Brolala doing very well. And over the last week, actually in terms of engagements, it's been super, super strong because we got the benefit of the Ubisoft Forward event combined with strong promotion on our biggest franchises. So we are off on a good start in terms of engagement on this quarter. The only thing we can say today, it's too early to anticipate what will be the engagement beyond lockdown. We still see a stronger engagement in the U. S. In July. That's why we think that there is still a confinement impact there. And on media headwinds, which is very good. Sorry, go on. I just had a follow-up just on Rainbow 6 Siege and Assassin's Creed. The growth rates that you guys are seeing at the franchise level in the quarter, 30% for Rainbow 6 and Assassin's Creed up 60%. Could you just unpack that a little bit more? Is that largely PRI driven or is that more unit sales? It's been both. We've seen stronger dynamics on both sides on acquisition growth and PRI. As we said just before, the PRI increased multiplication by 8 versus last year on origins when we look at RDC over the quarter is a key evolution for the brand. But we also saw a strong acquisition and it's clear that VALALA helped a lot in driving the franchise to have such a stellar growth across all the Assassin's Creed games, but of course, mostly RDC and Origins. And for Rainbow Six Siege, the 30% growth has been driven both by acquisition and PRI. Great. Thank you both. Thank you. And we'll now take our final question from Nick Dempsey of Barclays. Please go ahead. Yes, good evening. I've got 2 left. First of all, just on the question of $70 pricing that was discussed earlier. I think you said that your price for 3 games to be launched before Christmas at the $60 level. Does that mean that there's a possibility that you could run with $70 for any of the games launching in calendar Q1 of 2021? 2nd question, given the boost to engagement from lockdown the start of this year and the fact that you have 5 games launching this year, are you still hopeful that you can show positive year on year growth in net bookings for FY 2022? So as we said earlier, for the $60 price, we are really concentrating on the Christmas releases, and we have decided that those games would be launched at $60 Yes. On fiscal 2022, yes, we said that we are shooting for top line growth relative to fiscal 2021. We expect to release 3 to 4 AAA games including Skull and Bones that is a new brand. We also said that we will release free to play games and that's still well on track on that side. And we rely on a very strong back catalog growth next year, including digital growth, including PRI, including mobile growth as well as strong growth from PC and Asia. So all of this is still well on track. As we said before, we are closely monitoring the productivity on each and every game that would be released next year given the important level of employees still working from home. So that's just something that we are looking carefully. And there are no further questions at this time. I would like to hand the call back to you. Well, thank you very much for all your questions, and have a nice day or a nice evening. Thank you. And that now concludes the call. Thank you all for your participation. You may now disconnect.