A video game company can only take so many financial hits before admitting that there’s something wrong with its approach.
With company share prices down by 86.5% since September 2019, which shouldn’t have happened considering how many video game companies thrived during the COVID-19 pandemic, Ubisoft is now singing a different tune.
In its latest earnings call, Ubisoft ocnfirmed that it’s lowering its financial targets for the current fiscal year, expecting break-even non-IFRS operating income after it had already lowered its forecasts for Q2 from €500 million ($557.7 million) to just €350 million ($390.4 million) to €370 million ($412.7 million). Ubisoft is now targeting net bookings of €1.95 billion at the end of the fiscal year.
This comes shortly after Ubisoft faced criticism shortly following the release of Star Wars Outlaws, one of the year’s most talked-about games. Although not a Game of the Year contender by any means, Star Wars Outlaws was, in many ways, a major refinement of Ubisoft’s open-world formula and gave audiences a chance to explore the Star Wars universe throughout the years of someone who was neither Sith nor Jedi.
Unfortunately, as per Ubisoft, Star Wars Outlaws enjoyed a “softer than expected” release, which basically means that the game didn’t sell particularly well. As a result, the company released an unusually candid response as it delayed Assassin’s Creed Shadows to February 14, just days before Avowed comes out on February 18, and potentially bringing it close to the release date of Ghost of Yotei as well as other upcoming Take-Two Interactive titles, including Grand Theft Auto 6—a development Ubisoft CEO Yves Guillemot once welcomed.
It definitely does seem like Ubisoft is a video game company on its death bed, close to being sold off for parts in an economy where companies don’t sell for as much as they used to before.
After a decade of dominance following multiple successes, Ubisoft finds its reliable franchises struggling. Watch Dogs: Legion flopped, The Division: Heartlands is now canceled, Far Cry 6 was nowhere near as successful as Ubisoft wanted it to be, and The Division 3 is years away. Its attempts to start new franchises failed as well, with Avatar: Frontiers of Pandora and Immortals Fenyx Rising both failed to sell nor make an impression. Arguably the last commercially successful game Ubisoft released was Assassin’s Creed: Valhalla, which is why the French publisher milked the game for all its worth. You could argue for Prince of Persia: The Lost Crown, but it probably didn’t move the financial needle enough, considering it wasn’t a AAA release.
With that said, the changes that Ubisoft are making going forward should at least help shift public perception and move more units.
According to Ubisoft, Assassin’s Creed Shadows will be available to purchase and play on Steam, as will other future Ubisoft games, and it will also include PS5 Pro enhancements. Also, to try and squeeze more out of Star Wars Outlaws, Ubisoft is planning to roll out feedback-based updates that will help the game “engage a large audience during the holiday season” including launching on Steam on November 21. Finally, addressing concerns about its pre-order bonuses, Ubisoft promises that Assassin’s Creed Shadows will not get a Season Pass, and everyone will get to play the game at the same time. The only bonus you get from pre-ordering is the first expansion for free (current pre-orders are canceled).
It’s unclear if the three-month delay to polish and possibly change public perception of a “feature complete” game is enough to help Assassin’s Creed Shadows sell well enough to save Ubisoft, but it does give it the best chance possible of succeeding and selling well.
We’ll find out over the next couple of months if these changes are enough for the company to recover.
