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Ubisoft has postponed the release of the next title in its popular “Assassin’s Creed” game franchise – called “Assassin’s Creed Shadows” – by three months to February 14, 2025.
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French video game publisher Ubisoft It faces questions about its future, as it faces a weak games pipeline and pressure from investors to sell.
The company, which develops the “Assassin’s Creed” franchise, said in updated guidance last week that it has pushed back the release of the next title in the popular game series – called “Assassin’s Creed Shadow” – by three months to Feb. 14, 2025. has been postponed until .
Ubisoft also cut its guidance for the 2024-2025 fiscal year, saying it now expects net bookings to fall to around 1.95 billion euros. Ubisoft said it expects net bookings for its fiscal second quarter to come in between 350 million and 370 million euros, down from the 500 million euros previously expected.
“The revised targets primarily reflect the decisions made for Assassin’s Creed Shadows and are a softer than anticipated launch for Star Wars Outlaws,” Ubisoft said.
It comes after the company’s “Star Wars Outlaws” game — an action-adventure based on the sci-fi movie series released this summer — had disappointing sales and mixed reception from gamers. had to face Ubisoft said that its learnings from the release of Star Wars Outlaws forced it to devote more time to polishing Assassin’s Creed Shadows.
The company said it is also scrapping plans to release its new Assassin’s Creed game with a “Season Pass,” a payment offering access to bonus quests and additional downloadable content at launch. There was an increase.
Ubisoft added that it now plans to release Assassin’s Creed Shadows on Steam, Valve Corporation’s online games store, on its launch day, making the PC version of its games exclusively distributed on Epic Games’ digital storefront. The track record of doing so will end.
Ubisoft CEO and co-founder, Yves Guillemot, speaks at the Ubisoft Forward live stream event on June 12, 2023 in Los Angeles, California.
Robin Beck | AFP | Getty Images
“In light of recent challenges, we recognize the need for greater performance while delighting players,” Ubisoft CEO Yves Guillemot said in a statement last week, adding that the company’s executive committee will implement is launching a review to further improve
Ubisoft’s shares have fallen to a decade low amid pessimistic investor expectations about its triple-A games pipeline and financial prospects.
To compound business woes, the company faces potential strike action in France after the country’s STJV video game workers union called for the company to bring workers back to the office on Oct. 15-17. A three-day industrial action was demanded. three days a week.
Activist investor pressure
Following the decision to delay its upcoming Assassin’s Creed game, AJ Investments, an activist investor with less than a 1% stake in Ubisoft, said it would join the company’s other shareholders in selling the French firm to private equity firms. is working to force the sale of Or to Chinese gaming giant Tencent.
Tencent owns a About 10% stake in Ubisoft.
In an open letter last week, AJ Investments said it had secured the support of 10% of Ubisoft’s shareholders for its pressure campaign, adding that it would hire proxy advisory firms to prepare for voting at the company’s next general meeting. intends to cooperate with CNBC could not independently verify this figure.
AJ Investments said, “We have approached industry experts as potential board members and executives to replace the current management and achieve our strategic goals. Will recommend the candidates.”
AJ Investments noted that it is set to discuss its proposals with Ubisoft’s management on Tuesday. The firm added that if necessary, it would demonstrate in front of Ubisoft’s headquarters in Montreuil, Paris.
Several bank analysts lowered their price targets for Ubisoft following news of its upcoming game being delayed, though many kept their ratings unchanged.
Deutsche Bank, which downgraded the stock to “hold” from “buy”, said that the cut in Ubisoft’s guidance was “greater than we expected” and that the postponement of Assassin’s Creed Shadows would result in next fiscal year. In “Revenue Increases Substantially”. .
Deutsche Bank’s George Braun also stated that he expected Assassin’s Creed Shadows to perform worse than he initially expected, predicting unit sales of 7 million in the 12-month period following release. has gone This is down from earlier estimates of 8 million.
Meanwhile, JPMorgan said in a note last week that it now expects lower unit sales of Ubisoft’s triple-A game releases and sees a slower pace of releases moving forward. JPMorgan maintained its “neutral” rating on Ubisoft stock, but lowered its price target to 11 euros from 21 euros.
“Mid-cap developers are being squeezed by development cost inflation that’s not matched by enough volume/monetization improvements to sustain attractive profits,” JPMorgan analysts Daniel Kerwin and David W. Peet said in a note. No.”
“UBI’s capital structure and lack of cash generation in recent years have put it under increasing pressure to reduce investment/expenditure.”
Reaction
Still, some analysts were more sympathetic to Ubisoft’s struggles.
Analysts at Wedbush Securities suggested the firm fell victim to coordinated “trolling” on review sites by people trying to lower user score averages for the company’s Star Wars Outlaws game.
“We believe Star Wars Outlaws was affected by a concerted effort to troll Ubisoft games in particular and Star Wars content in general,” said Wedbush analysts Michael Pitcher, Alicia Reese and Cade Barr. wrote in a note last week.
“The game received an unusual number of user reviews with a clear negative bias (including a large percentage of “zero” reviews), despite seeing acceptable review scores from reputable review sites. This is an unusual win-win situation.” Because of which Ubisoft will have to reduce its number,” he added.
Analysts at Wedbush said that, despite the delay to its upcoming Assassin’s Creed title, they expect the game to sell 7 million units in its launch quarter and think it will have “all of Ubisoft’s sales ever.” likely to be one of the top sellers.”
Decline of industry.
Ubisoft’s woes come as the vast video game space faces an industry-wide downturn.
There is a global games market. According to research firm Newzoo, growth will only be 2.1 percent year-over-year in 2024. He is 0.5 percent increase in 2023but nowhere near the levels of growth seen during the 2020 and 2021 Covid-19 pandemic years.
One of the problems for game publishers today is that gamers are spending more of their time on older games than newer titles, said James Lockyer, a technology research analyst at UK investment bank Peel Hunt.
“In the post-Covid years, the number of games released each year has increased significantly,” Lockyer told CNBC via email. “As a result, consumers have had more choice over the past few years.”
“However, more choice plus squeezed wallets to live with means that consumers’ cash is spread more thinly, causing these games’ revenues and ROIs (return on investment) to often fall short of expectations.” are,” he added.
