Stay, and thank you for standing by. Welcome to the Ubisoft Q1 fiscal year 2026 sales webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Yves Guillemot, Ubisoft Co-Founder and Chief Executive Officer. Please go ahead, sir.
Welcome, everyone, and thank you for joining the call today. The first quarter delivered mixed results with net bookings below our expectations. This reflects a lower than expected performance for Rainbow Six Siege, a partnership that is now expected to materialize in Q2, and to a lesser extent, an unfavorable foreign exchange impact. On the positive side, Assassin’s Creed Shadows delivered on its expectations, with no more than 5 million unique players since its launch. Rainbow Six Siege received highly positive player feedback thanks to its renewed gameplay and enhanced features that drove significant player engagement growth. However, while we rolled out a fundamental business model evolution for the long-term future of Rainbow Six Siege, player spending this quarter was significantly impacted by temporary disruptions due to technical pricing issues. Despite this one-off setback, the growth potential of the game is strong, with solid traction on activity and in-game spending.
We also continued to make meaningful progress on Ubisoft’s transformation by outlining a new operating mode built around business units called Creative Houses. This unit will reflect our diverse types of gaming experiences and will allow for extended quality, focus, autonomy, and accountability. Over time, each of these Creative Houses will boost creative vision and business performance. The new subsidiary announced earlier this year and overseeing our flagship brands, Assassin’s Creed, Far Cry, and Rainbow Six, is the first of the Creative Houses. The announcement of its leadership team marks an important milestone as we move toward a more agile and focused organization while ensuring necessary long-term stability and creative vision. I will now hand the call over to Frederick. Thank you.
Thank you, Yves, and hello, everybody. Q1 net bookings stood at EUR 280 million, below expectations, as Yves just mentioned. Since the beginning of the fiscal year, and excluding XDefiant that had a significant contribution last year, MAUs, unique active players, and session days were broadly stable year on year. The back catalog net bookings stood at EUR 260 million this quarter, up 4% year- on- year, and up 6% excluding partnerships. Assassin's Creed Shadows performed in line with expectations and recently crossed the 5 million player mark. Ongoing additions continue to enhance the player experience, most notably the recent parkour update, which introduced new interactions for both Naoe and Yasuke, and was well received by players.
Ahead of the holiday season, the midterm potential of the game will be supported by the close of a wage expansion coming in Q2 that will introduce more than 10 hours of new content along with a new weapon, skills, and abilities, significantly expanding and enriching the game experience. Overall, the Assassin's Creed franchise is in great shape and has sold through more than 200 million units to date. The Rainbow Six Siege X update was launched on June 10 alongside Year 10 Season 2, introducing significant evolutions to its business model. Major upgrades to core systems, including gameplay improvements, a permanent new 6 versus 6 game mode called Dual Front, and enhanced player protection features. The launch of the update received strong community feedback, with players praising the visual upgrades, modernized maps with new environmental destruction, and the improved onboarding mechanics.
As Yves just mentioned, while resolved in June, the game players spending this quarter saw a significant impact from a pricing exploit with prepaid currency cards that temporarily inflated some virtual currency wallets. However, the momentum since launch is encouraging, with acquisition levels trending around five times above the same period last year. Session days were up 25% year on year in June since launch, and 65% compared to the three prior weeks' baseline. Overall, June delivered the third strongest MAU performance in the game history, trending only the two peak months during the COVID period in spring 2020. Session days have continued to grow 20% in July to date. Despite this one-off pricing setback, in-game spending has also shown positive traction, with the Valkyrie Paragon becoming the highest performing bundle launch in terms of currency spend.
These developments reflect growing sustained interest in the game and indicate that the evolving content and engagement strategies are resonating very well with players. The Siege X program is ambitious, and the evolution of its business model requires some fine-tuning over time. The game engine update enables much stronger quality and velocity of content releases, as exemplified by the success of the Paragon bundle, enabling us to raise the level of quality of our items and narrow the gap with the best in class in the industry, as well as doubling the cadence of limited time events per season. This sets the foundation for the years to come, and the long-term growth trajectory of the title is very promising.
The Division 2, for its part, enjoyed a remarkable performance this quarter, displaying a strong start to the fiscal year with the launch of Year 7, the Battle for Brooklyn DLC release, a new season, and its inclusion in the Game Pass that drove significant growth in acquisition and engagement, reaching the highest activity performance since May 2020. Elsewhere in the catalog, Star Wars Outlaws released its second DLC, A Pirate's Fortune, in mid-May. The update received positive reviews, with players praising the return of legendary pirate Hondo Ohnaka, the storyline, and new gameplay elements. The game is also set to reach a broader audience with its upcoming release on the Switch 2 console on September 4. Total digital net bookings reached EUR 250 million, down 3% year- on- year, and represented 89% of our total net bookings.
PRI stood at EUR 152 million, down 4% year- on- year, and represented 54% of our total net bookings. Mobile amounted to EUR 28 million, stable versus last year. This quarter, we also made progress on the group transformation. The ongoing work to reshape our operating model, led by an internal transformation committee, has laid the foundations of our new organization around agile business units called Creative Houses. Each of them will have its dedicated leadership team, objectives, and roadmap. This change aims to drive quality, focus, autonomy, and accountability while fostering closer connections with players and driving disciplined capital allocation. The new organization will be announced by the end of the calendar year. The first of these Creative Houses will be the new subsidiary, and it will be led by Christophe Derennes and Charlie Guillemot as Co-CEOs.
With complementary backgrounds, they bring strong industry expertise, a modern understanding of gamers' motivations, deep knowledge of the Ubisoft ecosystem, a relentless focus on quality delivery, and a bold creative vision. Together, they will play a pivotal role in accelerating the growth of the Assassin’s Creed, Far Cry, and Rainbow Six franchises, and building evergreen multi-platform game ecosystems. The closing of the transaction with Tencent, subject to regulatory approvals, is progressing well and continues to be expected by the end of 2025. Turning to the outlook today, we confirmed our fiscal year 2026 guidance. We continue to expect stable net bookings year on year, approximately break-even non-IFRS operating income, and negative free cash flows. Following the closing of the Tencent transaction, we expect to maintain a consolidated non-IFRS net debt position of around zero.
Additionally, the fiscal year 2026 housekeeping items for modeling purposes I provided during the full year earnings call mid-May are unchanged. The lineup for the rest of fiscal year 2026 includes Anno 117: Pax Romana, Prince of Persia: The Sands of Time Remake, Rainbow Six Mobile, and The Division Resurgence. A couple of other titles will be announced at a later stage. Anno 117: Pax Romana will be released on November 13, enabling the Anno series to enter a Roman Empire for the first time. It is the most ambitious title in the series, featuring a simultaneous release on both console and PC. Players will have the ability to choose their starting provinces, recruit military units for the return of land combat, and with the new feature Romanization, choose which way to upgrade our population tiers: Roman or Celtic.
The game will deliver a rich player experience across unprecedented levels of scale and details. Beyond fiscal year 2026, we continue to expect a return to positive non-IFRS operating income and free cash flow generation in fiscal year 2027, and to see significant content coming from our largest brands in fiscal year 2027 and fiscal year 2028. To conclude, we expect Q2 net bookings of around EUR 450 million. Expected growth versus Q1 is driven by strategic B2B partnerships, including new ones, growing a Rainbow Six Siege X contribution, and material TV series milestones-based revenues. We are now ready to take your questions.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to our first question. Your first question today comes from the line of Brian Pitz from BMO Capital Markets. Please go ahead.
Thanks for the question. Maybe some additional color on the softness from Rainbow Six Siege that was driven by pricing issues with prepaid currency cards. Can you walk us through exactly what happened and how much of that impact was really in the quarter? Can you quantify it a little more? Is it possible that any of the bookings could end up slipping into Q2, or should we just be viewing this as a myth that won't be filled later in the year? I just have a quick follow-up.
Yes, Brian. Thank you for your question. Yes, what happened is that, as you know, we moved with a meaningful business model change, and as we were launching X, it came with a high peak of player activity. The player spending was temporarily impacted by a pricing issue with prepaid currency cards that led to an artificial but meaningful inflation of some virtual currency wallets for some players. That had an impact on the June numbers, while all the KPIs are actually going very well. The issue was addressed and fixed. We will see a residual impact on the second quarter, but to a lesser extent. As for Q1, it had a meaningful impact on the performance. I want to reiterate that, as I mentioned, all the KPIs are strong and have been sustained in July with very strong player acquisition, returning players as well.
That led to activity growth + 65% over the last three weeks of June versus the prior three-week baseline. That translated into a sustained activity growth of 25% versus last year in June and sustained at 20% in July, putting aside the pricing issue with strong monetization trends, and notably coming from the bestseller Valkyrie Paragon bundle. We see that the game is on a strong base to grow solidly this fiscal year and beyond.
Okay. Maybe just regarding the soft launch on the long-awaited Rainbow Six Mobile in certain regions, any insight on timeline as well as some of the other new mobile opportunities you spoke about, but you didn't really disclose specifically on the last call?
We expanded indeed the soft launch in Latin America beyond the existing countries. That allows us to really test the KPIs with a much bigger scale. The game is still planned to come this fiscal year, following the learnings we get from that soft launch period. As for other mobile opportunities, we'll be coming also with The Division Resurgence this year.
Okay, great. Thanks so much.
You're welcome.
Thank you. Your next question comes from the line of Nick Dempsey from Barclays. Please go ahead.
Good afternoon, guys. First of all, I'm just wondering, could it be that some of the good trends on session days and other KPIs for Rainbow Six Siege is just because some players have found this way to boost their virtual currency wallets, and therefore that could have boosted how much they played the game? Is there really no correlation between suddenly finding yourself in possession of more currency and how much you play the game? Second question is, in terms of your guidance, I think you now need to deliver about EUR 1.1 billion in the second half of 2026. We've got Anno 117 , we've got Prince of Persia r emake, we've got the mobile games, which will get started in that period. Can you give us any sense of how big in the sort of spectrum of your games the two unannounced games are to try and help us build confidence on that EUR 1.1 billion?
Thank you, Nick. No, there isn't. We've seen no correlation whatsoever between this pricing issue and the activity. The activity has really been driven by a very strong appreciation of the new game mode we've been bringing and the numerous gameplay improvements that we brought to the maps of the five versus five, plus a major visual upgrade and also strong audio improvement and all the systems. That's been the key driver for the activity growth. In terms of the second question, we'll have Rainbow Six Siege that will have solid growth in the second half, so that will contribute to that number. Beyond the announced releases, we will have a couple of other titles to announce, but what we can just say at this stage is that it's going to be paid content of strong quality. We also have a game that will be launched on the Switch 2.
Okay, thank you.
Thank you. Your next question comes from the line of Alexander Peterc from Bernstein. Please go ahead.
Yes, good afternoon. Thank you for taking my question. I just have a couple. First one on the wallet glitch. Could you quantify what the impact was on revenue? Do you have any insights into that? The second one is on the timing of the releases. When you say that the mobile, so Rainbow Six Mobile and The Division Resurgence, is that coming in the fourth quarter of fiscal 2026, or could it come earlier? Same for Pax Romana and the Prince of Persia remake. Thanks.
On the first quarter, the majority of the gap in the performance came from Rainbow Six Siege, and a significant large part of that coming from the wallet issue. That's all we can say on this. On the second question, we are not coming with dates other than for Pax Romana that will come on November 13. We'll give you more information on the very date for the other games to release.
Excellent. Thank you very much.
Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone keypad. We will now go to the next question. Your next question comes from the line of Mike Hickey from The Benchmark Company. Please go ahead.
Hey, Yves, thanks for taking our questions. The first one on Assassin’s Creed Shadows, 5 million units year to date. How does that compare with other Assassin’s Creed launches from that franchise, Yves? The second question would be just on your pipeline through FY 2026. Two unannounced games are almost into August here. We’re in the second half of your fiscal. I’m just curious your confidence that you can deliver on the games here in your pipeline through FY 2026 as opposed to having to potentially delay them into FY 2027. Thanks, guys.
Yeah, on the Assassin’s Creed Shadows, it has a very good start. We have lots of things that are going to come soon. We have an expansion that is coming in before the end of the quarter, and we have also some new versions that will come on other machines. We have a good visibility on what it can achieve. What I can say is that it's really going well. We can't say exactly where it will be, but what we see is that it reacts very well to price drops that we just did a few days ago. We have a good perspective for the game. As for your second question on the pipeline for FY 2026, we want, of course, to come to players first before we make any further announcement. Yes, we are confident they will come in the second half.
Okay, good. Just a quick follow-up on Shadows. Have you announced that for the Switch 2, or is that a game that is just too expensive to be portable for the Switch 2?
We just announced that Star Wars Outlaws will come on Switch 2, but we haven't said which other games will come on the console for that coming year. There is more to say in the coming months.
Thanks, guys. Good luck.
Thank you. That was our final question for today. I will now hand back for closing remarks.
Thank you very much for your time today, and have a good evening or a good day. Thank you.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.