Gameloft's 2014 revenues drop 3% as 2014 line-up flops

Looks to ads and better games for rebound

Gameloft's 2014 revenues drop 3% as 2014 line-up flops

French mobile publisher Gameloft (EPA:GFT) has announced its 2014 financials, for the 12 months ending 31 December 2014.

Total revenues were $275 million (€227.3 million), down 3 percent year-on-year, although they were up 1 percent on a constant-exchange-rate basis.

Q4 sales were $73 million (€60.2 million), down 3 percent year-on-year but up 8 percent quarter-on-quarter.

In keeping with French accounting rules, Gameloft doesn't announces its profits until 18 March,

Less is less

In terms of why the company had experienced this decline, CEO Michel Guillemot pointed to a slowdown of releases in 2014; 12 compared to an average of more than 20 in previous years.

"It has been a mixed year for Gameloft with its back catalogue performing strongly but a disappointing contribution from its 2014 line-up," he said.

High profile games released during 2014 included Cars: Fast as Lightning, Action Star G, Pastry Paradise and the much-delayed Brothers in Arms 3.

However, back catalogue accounted for 90 percent of Gameloft's 2014 sales.

Looking ahead

"In the past few months we have made several internal adjustments that will allow the company to release once again around twenty new titles per year going forward and to launch these games at a regular pace during the year," Guillemot continued.

One high profile game that Gameloft released in 2014 was Brothers in Arms 3

"In the meantime, the ongoing traction of our back catalogue has shown that many of our products have the potential to contribute to revenues for several years.

"The combination of strong back catalogue sales and of a robust line-up of new games should allow Gameloft to return to profitable and rapid growth."

One key release in 2015 will be the fifth game in Gameloft's Dungeon Hunter franchise.

Ad funding

Looking at the company's global business, Europe and the Middle East accounted for 33 percent of 2014 sales; North America 28%; APAC 22%; and LATAM 18%.

We expect advertising to become a significant new line of business for the companuy.
Michel Guillemot

The number of monthly active players averaged 170 million in Q4, and daily actives averaged 21 million.

That gives an engagement ratio of 12 percent.

During 2015, Gameloft is also looking to significantly drive its advertising revenues.

It's setting up its own internal digital advertising agency and will sell inventory in around 20 of its games.

"With major advertising companies now switching a larger part of their budgets to mobile and with Gameloft being one of the leading publishers by downloads and audience, we expect advertising to become a significant new line of business for the company and to unlock long-term shareholder value," added Guillemot.

[source: Gameloft]

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