Ubisoft has delayed the release of Assassin’s Creed Shadows, the next game in its popular Assassin’s Creed franchise, by three months, to February 14, 2025.
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French video game publisher Ubisoft The company is facing problems ahead as its gaming pipeline dims and investors pressure it to seek a sale.
The company, which makes the Assassin’s Creed franchise, said in updated guidance last week that it has delayed the release of the next game in the hit franchise, Assassin’s Creed: Shadows, by three months to February 14, 2025. day.
Ubisoft also lowered 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 in the second fiscal quarter to be 350 million to 370 million euros, down from its previous forecast of 500 million euros.
Ubisoft said: “The revised targets primarily reflect decisions regarding Assassin’s Creed: Shadows and a softer-than-expected launch for Star Wars: Outlaws.”
It follows disappointing sales and mixed reviews from players for Star Wars: Outlaws, an action-adventure game based on the iconic sci-fi film series that was released this summer. Ubisoft said that lessons learned from the release of Star Wars: Desperados led it to invest more time in polishing Assassin’s Creed: Shadows.
The company said it also canceled plans to release a new Assassin’s Creed game with a “Season Pass,” a paid add-on that would provide bonus missions and additional downloadable content at launch.
Ubisoft added that it now plans to release Assassin’s Creed: Shadows on Valve Corporation’s online game store Steam on launch day, ending its streak of releasing PC versions of the game exclusively on the Epic Games digital storefront.
Ubisoft CEO and co-founder Yves Guillemot speaks at the Ubisoft Forward live event in Los Angeles, California on June 12, 2023.
Robin Baker | AFP | Getty Images
“Given recent challenges, we acknowledge the need to improve efficiency while keeping players satisfied,” Ubisoft CEO Yves Guillemot said in a statement last week, adding that the company’s executive committee was initiating a review to further improve execution.
Ubisoft’s stock price has fallen to its lowest point in a decade amid pessimistic investor expectations for its triple-A game product line and financial prospects.
To make matters worse, the French STJV video game workers union has called for a three-day strike from October 15 to 17 to protest the company’s attempts to get employees back to the office, and the company may face strike action in France.
Pressure from activist investors
Following the decision to delay the upcoming Assassin’s Creed game, activist investor AJ Investments, which owns less than 1% of Ubisoft, said it is working with the company’s other shareholders to push the French company to sell itself to private equity company or Chinese gaming giant Tencent.
Tencent owns Approximately 10% stake in Ubisoft.
AJ Investments said in an open letter last week that its pressure campaign had received support from 10% of Ubisoft shareholders, adding that it intended to work with a proxy advisory firm to prepare for a vote at the company’s next shareholder meeting. CNBC could not independently verify that number.
AJ Investments said: “We have spoken with industry experts as potential board members and executives to replace current management and achieve our strategic objectives, and we will propose our candidates in due course.”
AJ Investments said it would discuss its proposal with Ubisoft management on Tuesday. The company added that if needed, it would be shown in front of Ubisoft’s headquarters in Montreuil, Paris.
Several bank analysts slashed Ubisoft’s stock price targets following news of delays to Ubisoft’s upcoming games, but many kept their ratings unchanged.
Deutsche Bank downgraded the stock to “hold” from “buy,” saying Ubisoft’s guidance cut was “bigger than we expected” and that the delay of Assassin’s Creed: Shadows “will push a significant amount of revenue.” By the next fiscal year.
Deutsche Bank’s George Brown also said he expected Assassin’s Creed: Shadows to perform worse than he initially expected, predicting sales of 7 million copies within 12 months of release. That’s down from the previous estimate of 8 million.
Meanwhile, JPMorgan said in a report last week that they now expect sales of Ubisoft’s triple-A games to decline and the pace of future releases to slow. JP Morgan maintained its “neutral” rating on Ubisoft stock but lowered its target share price from 21 euros to 11 euros.
JP Morgan analysts Daniel Kerven and David W Peat said in a report: “Mid-sized developers continue to be squeezed by development cost inflation, which does not lead to sufficient sales/monetization improvement to remain attractive. return.
“UBI’s capital structure and lack of cash generation in recent years puts it under increasing pressure to cut investment/costs.”
gap
Still, some analysts are more sympathetic to Ubisoft’s plight.
Analysts at Wedbush Securities say the company has been the victim of a coordinated “malicious attack” by people trying to drive down the average user score for the company’s Star Wars: Outlaws game on review sites.
“We believe Star Wars Desperados is subject to a plan to The impact of a coordinated operation specifically attacking Ubisoft games and Star Wars content in general.
“Despite seeing acceptable review scores from reputable review sites, the game received an unusual number of user reviews with an apparent negative bias (including a large proportion of “zero” reviews). This is a rare case of involuntary celibacy triumphing, resulting in Ubisoft having to reduce their numbers,” they added.
Analysts at Wedbush say that despite the delay of the upcoming Assassin’s Creed game, they expect the game to sell 7 million copies in the launch quarter and believe it “has the potential to become one of Ubisoft’s best-selling games of all time” ”.
industry downturn
Ubisoft’s troubles come as the broader video game sector faces an industry-wide downturn.
The global gaming market is Growth in 2024 will be only 2.1% year-on-yearAccording to research firm Newzoo. that is Growth rate in 2023 is 0.5%but nowhere near the levels seen during the Covid-19 pandemic in 2020 and 2021.
James Lockyer, a technology research analyst at British investment bank Peel Hunt, said part of the problem facing game publishers today is that players are spending more time playing older games than new ones.
“In the years following COVID-19, the number of games released each year has increased significantly,” Lockyer told CNBC via email. “As a result, consumers have had more choices over the past few years.”
“However, more choice coupled with a squeeze on the cost of living means consumers are spreading their cash more widely, resulting in revenue and return on investment from these games often being lower than expected,” he added.
