Ubisoft Stock Plummets After Watch Dogs Legion, Rainbow Six, Gods And Monsters Delays

ubisoft stock gods monsters rainbow six watch dogs legion delays

Ubisoft shares plunged 16 percent on Friday after it released a profit warning, delayed a trio of video games, and announced an overhaul of its development process.

The gaming giant behind the Assassin's Creed, Watch Dogs and Far Cry franchises cut its projected net bookings for the year to March 2020 by more than a third to 1.45 billion euros ($2.355 billion), and slashed its operating profit forecast from 480 million euros ($779 million) to between 20 million and 50 million euros.

Ubisoft blamed the downgrades on lower sales expectations for two Tom Clancy games, Ghost Recon Breakpoint and, to a lesser extent, The Division 2. Their underperformance led it to push back the release dates of Gods & Monsters, Rainbow Six Quarantine, and Watch Dogs: Legion into its next financial year.

“Critical reception and sales during the game’s first weeks were very disappointing,” CEO and cofounder Yves Guillemot said in a press release, referring to Breakpoint. Ubisoft underestimated the difficulty of drumming up interest in a sequel to a live multiplayer game, especially after updating and improving the original game, he said.

The company also realised gameplay innovations “need to be perfectly implemented” after Breakpoint’s changes “generated very negative reaction” and were “strongly rejected by a significant portion of the community,” Guillemot said. A third problem was Breakpoint’s failure to stand out, he added.

“We’re not happy with the fact that our decision here impacts significantly the short term of our financials, but we believe that we’re taking then this opportunity to definitely further elevate the quality of all of our games by coming with stronger identity features, differentiation,” Guillemot said. Future games will also feature “original new formulas” and “highly optimised experiences,” he added.

Guillemot shared more details about Breakpoint’s issues during a call with analysts. “There were more bugs than expected at the launch,” he said, and players viewed its large online store as a cash grab and it was “really not appreciated at all.”

Ubisoft assumed a gap of 30 to 36 months would be long enough for a sequel, but that timeframe was too short to optimise gameplay and build enough anticipation and momentum, Guillemot said. Changes to gameplay can be “unsettling” so they have to be seamlessly introduced to win over players, he added. Ubisoft also recognises all its games need to be “strongly differentiated,” he said.

The group tried to take the sting out of its profit warning by announcing bullish forecasts for the year to March 2021. It expects 2.6 billion euros in net bookings and 600 million euros of adjusted operating income, although those figures are flattered by anticipated revenues from the delayed games.

Image: Business Insider

Comments

    RIP my EU Game Developer portfolio – though it's almost refreshing that they aren't forcing one of those titles out early to generate revenue. I'm keen for the next Watch Dogs.

    Last edited 28/10/19 3:34 pm

    Well yeah of course Breakpoint sales were disappointing - it was a rushed piece of shit game and it showed.

    2K are experiencing that right now with WWE2K20. Nicely put - it's a fucking mess!

    Last edited 28/10/19 5:07 pm

    An insulting microtransaction platform is not a "gameplay innovation", mate. And more bugs than expected!? Did they completely ignore the alpha/beta feedback?

      Did they completely ignore the alpha/beta feedback?

      Do you really have to ask?

    This is why publicly-traded publishers suck. They do the right thing (Sort of. Eventually. In a way. If you ignore the fact they made a complete balls-up to prompt it), and investors hammer them for it. The simple fact is, the games they delayed will do better for the extra time invested in them. This should be seen as a positive move by Ubisoft, not one to send investors running.

    They would have expected this. They are thinking long term.

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