But how bad is it really?
Today Yahoo’s Finance Blog ran a story under the headline ‘Ubisoft Stock Gets Crushed after Abysmal Assassin’s Creed Unity Launch’. Ubisoft’s stock plummeted over 9 per cent and according to Yahoo Finance the negative reactions to the launch of Assassin’s Creed Unity were to blame — primarily fan reaction online and a lower than expected Metacritic score. This story has been re-reported in a number of other game sites.
9 per cent: it is a significant drop, and it’s hardly good news for Ubisoft, but how problematic will it be in the grand scheme of things?
The graph above shows the performance of Ubisoft’s stock over the last five days. It makes for grim reading. You can see precisely when the Assassin’s Creed Unity problem hits. The reaction of the market was not positive.
But let’s take a broader look.
This details the performance of Ubisoft’s stock over the last year. This is a little more optimistic, although you might note the drop around July, which came as a result of July’s Quarterly Report. That’s when Ubisoft announced less than expected sales for Watch Dogs.
This details the performance of Ubisoft’s stock over the past two years.
Before today’s drop Ubisoft’s stock had increased over 40 per cent in a year — which represents a remarkable level of growth. Spread that to two years and Ubisoft has grown by over 77 per cent.
Let’s compare this Ubisoft’s two biggest rivals in the games market.
The above graph compares the performance of Ubisoft’s stock to Activision’s stock over the last year. As you can see, both companies are on a similar trajectory, although Ubisoft has clearly had a stronger year according to the market. Activision is still recovering from the launch of Destiny, but worthy of note: it is recovering from the launch of Destiny.
Here’s a similar graph comparing Ubisoft to EA. Again, the graph is comparable. Until the tail end of this year Ubisoft was outperforming EA in the stock market. Again, the difference is minimal, even accounting for the 9 per cent drop by Ubisoft.
Now let’s take a look at a final graph. This one might be the most telling.
This graph compares the performance of Ubisoft’s stock to the overall market. Ubisoft is starting to look like a pretty safe investment right now and if you look at how Activision is starting to recover from the Destiny drop, one can only assume that Ubisoft will recover in the same way, particularly if Far Cry 4 is a success and reviews well.
But in general, over the last two years in particular, video games have been an incredibly safe, lucrative investment. That’s an interesting fact in and of itself. It’ll be interesting to see how Ubisoft’s stock respond over the coming months.