With shares at 10-year lows, Assassin's Creed maker Ubisoft faces questions over its future
Gaming firm Ubisoft is facing questions over its future amid a lackluster games pipeline and pressure from an activist investor to sell itself and go private.
Ubisoft, the French video game publisher behind the popular Assassin's Creed franchise, has announced a three-month delay for the release of its next installment, Assassin's Creed Shadows, which is nOW scheduled to hit shelves on February 14, 2025. The company has also revised its guidance for the 2024-2025 fiscal year, expecting net bookings to fall to around 1.95 billion euros, a significant drop from its previous projections.
The delay is attributed to Ubisoft's decision to give the game more time to polish and refine its gameplay, following the disappointing sales performance of its recent release, star wars Outlaws. The company's CEO, Yves Guillemot, acknowledged the need for greater efficiency while still delighting players, and announced a review to improve execution. Ubisoft's shares have plummeted to decade-lows due to concerns over its triple-A games pipeline and financial prospects.
The company is also facing potential strike action in France, with the STJV video game workers' union calling for three days of industrial action over Ubisoft's bid to get workers back in the office three days a week. The union is pushing back against the company's efforts to increase productivity and reduce costs.
Meanwhile, activist investor AJ investments, which holds a less than 1% stake in Ubisoft, is pushing the company to sell itself to private equity firms or Chinese gaming giant Tencent. AJ Investments has gathered support from 10% of Ubisoft shareholders and plans to propose its candidates for the company's next general meeting.
Several bank analysts have slashed their price targets for Ubisoft, citing the delay and concerns over the company's financial prospects. However, some analysts, such as Wedbush securities, believe that Ubisoft has been the victim of coordinated "trolling" and that its games are still capable of performing well.
The global video games market is also facing an industry-wide slump, with growth expected to slow down in 2024. The market is facing challenges such as gamers devoting more time to older games, a cost-of-living crisis that is squeezing wallets, and increased competition from free-to-play games. As a result, game publishers are facing lower revenues and returns on investment.
The delay and financial struggles at Ubisoft have sent shockwaves through the gaming industry, with many analysts and investors closely watching the company's performance. The success of Assassin's Creed Shadows will be crucial in determining Ubisoft's future prospects and its ability to recover from its current challenges.
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