Paris (AFP) – Shares in French video game giant Ubisoft plunged nearly 20 percent Thursday after it dropped its profit targets following a delay to its latest “Assassin’s Creed” title. The publisher warned Wednesday that the game would now only hit shelves on February 14, instead of mid-November — in time for the crucial holiday season — as announced.
In early afternoon trading, Ubisoft shares were down 18 percent at 9.41 euros ($10.50), with the stock now down around 60 percent since the beginning of this year. Adding to investor concerns, Ubisoft said the profit alert also reflected a need to update its “Star Wars Outlaws” game, released in August, “in response to player feedback.” Sales of the hotly awaited title have been lower than expected, and Ubisoft said its developers were focused on improving the game before moving to “further polish” the gameplay of “Assassin’s Creed Shadows.”
“Whilst a cut was widely anticipated (note the shares are already down 30 percent since the launch of Outlaws), the delay to AC Shadows is incrementally disappointing,” analysts at Deutsche Bank said in a research note. The German brokerage also noted that Ubisoft’s announcement came just after US rival Sucker Punch Productions said it would release “Ghost of Yotei” — the eagerly awaited sequel to samurai-themed “Ghost of Tsushima” — next year.
“Given the less favourable release slot, risks of further delays to address backlash surrounding the title, and new competition in the form of Ghost of Yotei… we lower our unit estimates for AC Shadows from 8 million to 7 million over a 12-month period following release,” it said.
Ubisoft now expects net bookings, its preferred measure of sales excluding deferred revenues, of 350-370 million euros ($390-$410 million) in its second quarter, down from 500 million euros previously. The setback is the latest challenge for the French firm after slipping into the red in its 2022-2023 financial year before returning to profit last year. However, it has already announced dozens of layoffs this year alone as it struggles with an industry-wide downturn.
Also Thursday, several Ubisoft labor unions called for a three-day strike by French workers starting October 15 to protest a forced return to on-site work. Many employees have been working largely from home since the Covid pandemic, but management said in mid-September that at least three days a week would have to be spent at the office.
“Several of our colleagues have built or rebuilt their lives (family, housing, parenthood) and cannot simply return to how things were before,” the STJV union said. Ubisoft, which cited in a September memo to staff that “creativity is stimulated by personal interactions, informal chats and working around the same table,” declined to respond to requests for comment from AFP.
© 2024 AFP
