Shares in Ubisoft fell by nearly a fifth after the French games company slashed its forecasts and said that sales over the crucial holiday season had been “markedly and surprisingly slower than expected”.
Paris-based Ubisoft, best known for its Assassin’s Creed and Just Dance franchises, said on Wednesday that it expected net bookings to drop 10 per cent in the financial year that ends in March from 12 months earlier. The group had previously forecast a 10 per cent rise.
Its shares shed 19 per cent to trade at €19.26 mid-morning in Paris on Thursday, the first day of trading since the statement was published after markets closed.
The warning suggests that macroeconomic pressures are hitting the games industry despite hopes that interactive entertainment will prove more resilient in a recession as it has in previous downturns.
“We are clearly disappointed by our recent performance,” said Yves Guillemot, Ubisoft’s co-founder and chief executive.
Ubisoft sliced more than €100mn from its third-quarter net bookings target, now set at about €725mn, citing lower-than-expected sales of games including the latest instalments of its Mario + Rabbids and Just Dance franchises, amid “worsening macroeconomic conditions”.
Ubisoft delayed its launch of the title Skull and Bones until the next financial year in order to “build awareness” for the game.
Analysts at Citi called Ubisoft’s update a “crushing profit warning” in a note to clients, suggesting that weak holiday sales were a “broader phenomenon” for the games industry.
Ubisoft is the second games company this week to lower its guidance after a disappointing Christmas. Shares in UK-based Frontier Developments dropped 40 per cent on Monday after it said sales of its flagship title F1 Manager 2022 “fell materially below expectations, potentially due in part to increased player price sensitivity related to worsening economic conditions”.