Following a dire sales report, another game delay and three cancelations, Ubisoft's stock price took a 10% hit on the Dow Jones. Despite Ubisoft having a number of high profile games currently in development including Avatar: Frontiers of Pandora, an unannounced Star Wars title, and Assassin's Creed Mirage, the French company appears to be in a bit of dire straits at the moment. Thanks to a recent financial report and emergency investor call, Ubisoft revealed some dire news to the public.
The highly troubled Skull and Bones is getting hit with its sixth delay, getting pushed out of its recent March 9, 2023 launch and settled into a more obscure next fiscal year, anytime from April 2023 to March 2024. Unfortunately, the bad news continued to pile up from there as Ubisoft then admitted that sales for Mario + Rabbids: Sparks of Hope and Just Dance 2023 did not meet expectations despite excellent ratings and an "ambitious marketing plan." Finally, the company also confirmed that three unannounced games have also been canceled.
The news no doubt concerned investors as well as traders as Ubisoft stock price on the Dow Jones took an initial 10.5% hit, which then continued in its downturn to nearly 14% a few hours later. The stock prices, at the time of writing, sit at $4.40 which have hit a seven-year low for the company. Combined with the game cancelations from June 2022, Ubisoft has now canceled seven games in total over the past 6 months, no doubt contributing to the uncertainty.
As a result of these canceled games and financial troubles, Ubisoft intends to "depreciate around €500m of capitalized R&D" as well as reduce the company's internal costs by €200m over the next two years through restructuring, selling off assets, and what it describes as "natural attrition." Unfortunately, this strongly implies that Ubisoft intends to lay off staff or hope that some choose to resign or retire instead.
While co-founder and CEO Yves Guillemot acknowledged the underperforming Ubisoft titles, he also partly laid the blame on poorer than expected economic conditions as well as what he felt was the industry moving more towards "mega-brands" and "everlasting live games." While the news isn't great, Ubisoft does have some help on the horizon with Assassin's Creed Mirage, which promises to take fans back to a more classic style experience. Ubisoft's own Massive Entertainment also has two releases upcoming with the anticipated Avatar: Frontiers of Pandora as well as a new entry in The Division franchise called Heartland.
Source: MorningStar; Ubisoft
