One of Ubisoft's biggest crises in its history is

One of Ubisoft's biggest crises in its history is ...

Ubisoft is facing one of the largest problems in its history, according to game reports.

Published on 01/13/2023 at 18:55

Ubisoft, a French video game company, has made headlines this week. What investors anticipated in recent days has finally happened: the company will not be able to fulfill its commitments in 2023, and three projects that have not yet been announced are postponed.

Summary

Unattainable goalsA problem that is both macroeconomic and strategic Is the critical prognosis engaged?

Unattainable ambitions

Ubisoft released a press release on its investor space on January 11, 2023, stating that the company would lose 500 million euros in the next financial year, which was initially forecast to be up 10%, but that the stock would still be down 10% following the announcement.

Mario + Rabbids Sparks of Hope and Just Dance 2023, as an explanation, were significantly and dramatically slower than anticipated, according to the company's statement. "Despite excellent ratings and player response as well as an ambitious marketing strategy, we were surprised by (our) games' underperformance."

A problem that is both macroeconomic and strategic.

The reality of the entertainment world is quite complicated in terms of increasing inflation that is putting households at jeopardy, as Karol Severin of MIDiA Research points out. Part of the reason for the instabilous economic situation in 2022 is the conflict in Ukraine and the disruptions encountered in the Chinese market.

Ubisoft's free-to-play games have failed to engulf the Guillemot family's finances in 2022, with everything from time limits on playing to boycotts of foreign games.

Has the best become the enemy of good at Ubisoft? Massive's Star Wars, Avatar: Frontiers of Pandora, or Beyond Good & Evil 2 — a huge undertaking that we haven't heard from for nearly two years — are already being developed. Especially as consumer expectations, like the investments allocated to production, are increasing.

Half-aware of the challenges that come with the Far Cry, the French developer says her strategy has been to continue developing our strongest franchises. "Our recent launches have failed to deliver on expectations," says Yves Guillemot, adding that "the industry's long-term outlook for the industry remains positive." "With more selective players, launching four big releases in the same year as Ubisoft plans for 2023-2024," warns Valentin Mory, an analyst at AlphaValue for BFM Bours

Is there a reliable prognosis?

The Ubisoft title difficulties have caused a substantial reduction in the stock market in January 2021. It has dropped by almost 73% in the last twelve months, with the company's total loss exceeding 54%.

According to analysts, the stock is generally grimace soup. Morgan Stanley, Wells Fargo, Cowen, Deutsche Bank, Barclays, Wedbush, and Citi have all dropped their prices in unison, deeming Ubisoft to be "safe".

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