Ubisoft shares plunge 20 after three games were canceled and

Ubisoft shares plunge 20% after three games were canceled and Skull and Bones postponed

Earlier this week, French publisher Ubisoft announced another postponement of pirate action game Skull and Bones, the cancellation of three games and lackluster sales of recent releases, prompting analysts to trim their financial forecasts for the company. Against this backdrop, Ubisoft’s share price immediately fell 20% to €19.38 per share.

    Image Credit: Sarah Meyssonnier/Reuters

Image Credit: Sarah Meyssonnier/Reuters

The company announced that it would write off expenses of EUR 500 million instead of the previously planned EUR 400 million and carry out a restructuring. It also announced a reduction in its full-year sales target after sales in 2022 fell short of expectations. Ubisoft pointed to the deteriorating economic situation in the world, which is why consumers began to spend less on non-essential goods.

Against this backdrop, analysts at JP Morgan downgraded Ubisoft’s rating “elevated” Before “neutral”in relation to “Weakening macroeconomic indicators, a difficult industry environment and a lack of information on the timing of upcoming releases and their potential success”. Analysts noted that another negative factor was the video game industry’s shift in focus towards mega brands and the rejection of small and medium-sized projects.

“For a couple of years, we felt that Ubisoft was spending too much money on non-A-tier franchises (like Skull and Bones). <…> Ubisoft clearly needs to refocus its efforts.”— say Cowen analysts.

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Alan Foster

Alan Foster covers computers and games and all the news in the gaming industry.

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