Ubisoft’s shares tumbled 20% on Thursday following a dismal revenue forecast and a major delay in the release of its much-anticipated game, “Skull and Bones.” The French video game giant announced late Wednesday that it is increasing its writedown estimate to 500 million euros ($538 million) from an earlier projection of 400 million euros. This move comes after the company reported weaker-than-expected sales for 2022 and revised its full-year revenue target downward.
The company attributed these financial setbacks to a deteriorating economy and reduced consumer spending on non-essential goods. In response to these challenges, JP Morgan downgraded Ubisoft’s rating to “neutral” from “overweight,” citing a weakening macroeconomic environment, a challenging industry landscape, and uncertainty surrounding the timing and success of future game releases.
Analysts are also concerned about the shifting dynamics in the video game industry, which increasingly favors mega-brands over smaller and mid-tier games. Cowen analysts criticized Ubisoft for investing heavily in non-A-tier franchises, such as “Skull and Bones,” and stressed the need for the company to refocus its efforts on high-potential products. They reduced their price target for Ubisoft from 34 euros to 22 euros, maintaining a “market perform” rating.
Morningstar analysts also cut their fair value estimate for Ubisoft from 60 euros to 35 euros, reflecting the anticipated revenue decline, slower top-line growth, and potential further delays in game releases.
As of 08:08 GMT, Ubisoft shares were trading down 19.48% at 19.38 euros, reflecting growing investor concern over the company’s financial outlook and strategic direction.
hii Aditi Sahu this side..
As an author and writer specializing in investment and finance , I am dedicated to delivering insightful articles and news stories that inform and engage the investment community . My focus is on providing timely and relevant content that covers market trends , innovative strategies , and key financial development . My goal is to equip investors with the knowledge and insights needed to make informed decisions and succeed in a dynamic financial environment.
