Ubisoft Stock Takes a Beating From Profit Warning and Game Delays
Investors didn't react kindly to Ubisoft's profit warning, sending shares of the games publisher down by as much as 32 percent, the largest decline the company has ever seen. The stock plummeted after Ubisoft said it now expects an operating loss of 40 million euros (around $54 million) to 70 million euros (around $95 million) for the year ending in March after delaying Watch Dogs and The Crew.
Ubisoft decided to delay both titles in order to improve the quality of game play. It's a decision that Ubisoft Chief Yves Guillemot told Bloomberg will "pay off in the long run." He also said the market is different now than before, indicating that blockbuster games are no longer a luxury, but a necessity to survive.
The French publisher originally intended to release Watch Dogs in November. However, that's now been pushed back to somewhere between March and September of next year, which will give the company time to asses the landscape once Microsoft and Sony release their respective next-generation game consoles.
"It’s little bits of polish and fine tuning, but they really matter -- we want these games to be the best out there for new generation consoles," said Guillemot. "Watch Dogs could be as big as ‘Assassin’s Creed,’ even bigger. It’s a great opportunity to increase our market share."
That gamble may pay off in the long run, but in the short term, Ubisoft is taking a financial hit. The company reduced its full-year sales forecast by about a third to 995 million euros ($1.35 billion) to 1.05 billion ($1.42 billion) and now expects a loss, as opposed to an operating profit of 125 million euros ($169 million) on sales of 1.45 billion euros ($1.97 billion).
Ubisoft decided to delay both titles in order to improve the quality of game play. It's a decision that Ubisoft Chief Yves Guillemot told Bloomberg will "pay off in the long run." He also said the market is different now than before, indicating that blockbuster games are no longer a luxury, but a necessity to survive.
The French publisher originally intended to release Watch Dogs in November. However, that's now been pushed back to somewhere between March and September of next year, which will give the company time to asses the landscape once Microsoft and Sony release their respective next-generation game consoles.
"It’s little bits of polish and fine tuning, but they really matter -- we want these games to be the best out there for new generation consoles," said Guillemot. "Watch Dogs could be as big as ‘Assassin’s Creed,’ even bigger. It’s a great opportunity to increase our market share."
That gamble may pay off in the long run, but in the short term, Ubisoft is taking a financial hit. The company reduced its full-year sales forecast by about a third to 995 million euros ($1.35 billion) to 1.05 billion ($1.42 billion) and now expects a loss, as opposed to an operating profit of 125 million euros ($169 million) on sales of 1.45 billion euros ($1.97 billion).
