Shares in French video game giant Ubisoft plunged nearly 20% on Thursday after it dropped profit targets following a delay in its latest “Assassin’s Creed” title.
The publisher warned Wednesday that the game will now only hit shelves on February 14, instead of mid-November — ahead of the crucial holiday season — as announced.
In afternoon trading, Ubisoft shares fell 18 percent to 9.41 euros ($10.50), with the stock now down about 60 percent since the start of this year.
Adding to investor concerns, Ubisoft said the profit notice also reflected the need to update its “Star Wars Outlaws” game, which was released in August, “in response to player feedback.”
Sales of the highly-anticipated title were lower than expected, and Ubisoft said its developers focused on improving the game before moving on to “further optimize” the gameplay of “Assassin’s Creed Shadows.”
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“While a cut was widely expected (note that shares are already down 30 percent since Outlaws’ release), the delay for AC Shadows is incrementally disappointing,” Deutsche Bank analysts said in a research note.
The German brokerage also noted that Ubisoft’s announcement came on the heels of U.S. rival Sucker Punch Productions announcing that it will release “Ghost of Yotei” — the long-awaited samurai-themed sequel to “Ghost of Tsushima” — next time.
“Given the less favorable release position, the risks of further delays to deal with the backlash surrounding the title, and new competition in the form of Ghost of Yotei…we are lowering our unit estimates for AC Shadows from 8 million to 7 million in 12-months after launch,” he said.
Ubisoft now expects net bookings, the preferred measure of sales excluding deferred revenue, of 350-370 million euros ($390-410 million) in the second quarter, up from 500 million euros previously.
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The setback is the latest challenge for the French company after it fell into the red in the 2022-2023 financial year before returning to profit last year.
But it has already announced dozens of layoffs this year alone as it battles an industry-wide downturn.
Source: AFP