France’s leading publisher of digital and social games, Gameloft has posted an unimpressive show with its 2014 annual results. Head-quartered in Paris, the game developer has successfully kept millions of its gamers engaged throughout 2014, but the same may not be said for the other stakeholders who have invested in as it’s bottom-line has gone red reporting a loss of €6.4 million as against last year’s gain, €7.5 million.
What looks slightly positive is that Gameloft has maintained its over-all sales at €227.3 million despite a weakening Euro and with catalogue games accounting for 90 per cent of full-year sales, up 15 per cent year on year. The overall sales pie is distributed with contributions from EMEA at 33 per cent; North America at 28 per cent, APAC 22 per cent; and LATAM at 18 per cent.
Although the game developer states that the operating income is slightly better than anticipated at -€1.1 million, it has slipped drastically by 96 per cent as against last year’s €28.4 million. This is owing to Gameloft’s surging outlay in R&D, marketing and administration expenses which gross up to €186 million as against 2013’s €163 million.
What takes away a larger chunk of the profits before tax is its tax expense amounting to €8.1 million and the amount of unrecognised tax loss carry forward growing to €28 million compared to €10.3 million in 2013. This has squeezed the net income at a negative €6.4 million, despite the financial income standing at € 6.7 million. Also, over the last few years, the shrinking net income of Gameloft hasn’t left the investors delighted.
It has however reported a 170 million monthly active user base. On its product outlook, Gameloft too hasn’t disappointed with the numbers especially with the mobile gaming giving a boost to the entire gaming industry. Over 700 million Gameloft games were downloaded in 2014 on the App Store and Google Play pushing Gameloft to the top position worldwide in January 2015 by combining iOS and Google Play downloads according to App Annie’s 2014 worldwide index with Asphalt 8: Airborne being voted Best Mobile Game App at the 2015 GSMA Global Mobile Awards and Despicable Me: Minion Rush surpassing half a billion downloads.
“Gameloft will continue its efforts to effectively manage its investments and tightly control its costs to allow the company’s growth and profitability to bounce back in 2015,” states Gameloft CEO Michel Guillemot. “Gameloft has a massive audience, strong brands, solid recurring revenues, growth opportunities ahead and a healthy financial situation. We therefore look to the future with confidence.”
Speaking about its recently set-up in- house digital ad agency, Guillemot added, “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.”
