Ubisoft posts record operating loss in year to March but sticks to FY guidance

French video game maker Ubisoft holds annual news conference in Saint-Mande, near Paris

By Enrico Sciacovelli and Victor Goury-Laffont

(Reuters) - French video game producer Ubisoft posted the biggest operating loss in company's history on Tuesday but stuck to its guidance for the current financial year, citing a renewed focus on blockbuster titles.

The maker of the hit "Rainbow Six" franchise posted a full-year non-IFRS operating loss of 500.2 million euros ($550.6 million), in line with a target announced in its January profit warning.

The family-run firm has been dogged by game cancellations and delays in recent years, booking a writedown estimate of around 500 million euros in 2022 due to research and development expenses.

"As part of our progressive reallocation of resources, we notably plan to increase the number of talents working on the Assassin’s Creed brand by 40% over the coming years," co-founder and CEO Yves Guillemot said in a statement.

Ubisoft said its total headcount had dropped below 20,000 employees as of Tuesday from 20,700 at the end of September, following the announcement of a 200 million euro cost-cutting plan in its profit warning in January.

80% of the headcount drop is the result of voluntary departures, Chief Financial Officer Frederick Duguet said in a media call.

The group restated its plans to integrate generative artificial intelligence (AI) in game development, after it announced in March "Ghostwriter", an in-house AI tool designed to write first drafts of non-playable character dialogue.

The Paris-listed publisher confirmed its estimate for a full-year core profit of around 400 million euros, while forecasting first-quarter net bookings of around 240 million euros.

Ubisoft's 2023-24 line-up will include Assassin's Creed Mirage, a new entry in the company's flagship franchise, and the long-delayed Skull & Bones and Avatar: Frontiers of Pandora. The firm did not give a specific timeline for their release.

($1 = 0.9084 euros)

(Reporting by Victor Goury-Laffont and Enrico Sciacovelli; Editing by Jan Harvey)