Top Investment Manager Reveals: Ubisoft Shares Fall Amidst Disappointing Game Releases
By Alban Kacher
French video game maker Ubisoft saw a decline in its shares for the second consecutive day, with a 2.4% drop following the lackluster performance of its recent releases, including "Star Wars Outlaws". This adds to the over 30% drop since the beginning of the year, with shares trading at their lowest levels since 2015.
The underwhelming reception of Star Wars Outlaws, released on Friday, along with lower than expected interest in the free-to-play game Xdefiant, contributed to the decline, according to Midcap Partners analyst Charles-Louis Planade.
Ubisoft had pinned its hopes on these releases to support its financial recovery after facing negative cash flows and game cancellations in recent years. Chief Financial Officer Frederick Duguet had anticipated a boost in net bookings for the July-September quarter from the launch of Outlaws.
Despite positive critical reviews, Star Wars Outlaws received a "generally unfavorable" users' score of 4.9 on Metacritic. J.P.Morgan analyst Daniel Kerven noted that the game struggled to meet sales expectations, with a higher development budget compared to the previous release, Assasin's Creed Mirage.
Kerven lowered his sales expectations for Outlaws, citing underperformance compared to AC Mirage. Planade also mentioned a decline in Twitch viewership for Xdefiant, indicating minimal impact on Ubisoft's results in the coming quarters.
Ubisoft did not respond to requests for comment on the games' performance, leaving investors and industry watchers speculating on the company's future prospects.
Analysis: Ubisoft's stock decline can be attributed to the disappointing performance of its recent game releases, which has raised concerns about the company's financial recovery. With lower than expected sales and user ratings, investors may need to reevaluate their positions in Ubisoft and monitor upcoming releases closely to gauge the company's future performance in the gaming market.
