Ubisoft Share Price Tanks As Bad News Abounds

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Ubisoft Share Price Tanks As Bad News Abounds

Ubisoft graph

Ubisoft's share price has tumbled more than 25 percent, driven down by the Watch Dogs delay and "underperforming" Splinter Cell and Rayman releases.

Ubisoft dropped some unexpected bad news yesterday with the announcement that Watch Dogs, planned as a launch title for both the PlayStation 4 and the Xbox One, was being pushed back to sometime in the spring of 2014, along with upcoming racing game The Crew. That was followed by a revised financial projection that saw Ubisoft adjust its sales expectations for the 2013-14 fiscal year downward by about a half-billion bucks, and today, not entirely surprisingly, the company's share price has been appropriately pummeled.

The Paris-based company closed yesterday at €11.09 and opened today at €8.01 before climbing to €8.19 at the time of writing, a drop of more than 26 percent. In a conference call to investors, Ubisoft CFO Alain Martinez revealed that the delays of Watch Dogs and The Crew aren't the publisher's only troubles, as neither Splinter Cell: Blacklist nor Rayman Legends have performed as well as expected.

"As we have said we have experienced lower sales than we anticipated when we gave our targets," he said. "Already released games such as Splinter Cell, Rayman and others." He did not provide specific numbers.

Losing Watch Dogs and The Crew for the current fiscal year will provide Ubisoft a potentially big boost for 2014-15, but it's hard to imagine that they'll have the same impact: Missing the holiday quarter and the opportunity to be a PS4/Xbox One launch title is bound to diminish sales, quite likely to a significant extent. On the other hand, it's unlikely that Ubisoft is facing any kind of existential peril, so if you've got a few bucks kicking around this might not be a bad time to get in.

Source: CVG

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*Starts buying Ubisoft Stocks like mad*

Time to make some money...

... it's unlikely that Ubisoft is facing any kind of existential peril ...

Not unless EA or some other company uses the opportunity to enact a hostile takeover.

Otherwise, a drop in stock price is irrelevant to a well-established company. It has no effect whatsoever on any of their annual financial statements other than a possible "honorable mention" in the footnotes. The only possible effect it would have on Ubisoft directly is if they were planning on issuing new shares of stock in the near future. Otherwise, the only people it affects is the investors holding their shares.

People make a big deal out of stock prices, because it affects an individual's net worth. But stock price is mostly irrelevant to the company itself.

The Gentleman:
*Starts buying Ubisoft Stocks like mad*

Time to make some money...

Indeed.

Let's face it, regardless of the quality of the game Assassin's Creed 4 is gonna make a shit-tonne of money, because it's assassins creed, and then Ubisofts share prices will be right back where they started. So anyone who buys Ubisoft stock in the next couple of months is gonna be a rich mother-fucker come January.

I'm still miffed by them for pushing back Rayman Legends. If Watch Dogs isn't ready then it isn't ready, so be it. But Rayman Legends they pushed back almost an entire year because they made a last minute decision to release it on all consoles. So I can't really say I feel sorry for them when they make stupid decisions.

And now it is virtually guaranteed that every company out there will avoid delaying a game unless they have no other option, even if it really needs it.

Wonderful.

I think this is a severe overreaction.

Yeah, AC4 will more than make up for this.

I have to agree with Total Biscuit about Watch Dogs delay. Ubisoft spent a lot of money on Watch Dogs advertising to make sure that people know about it, and to make sure that Watch Dogs is seen as the signature next-gen title. And now it's getting a significant delay. Delaying it for this long at this point means that something is seriously wrong with the game. And I doubt that the fault lies within the PC version. If it did, they'd just delay the PC version because they don't really care that much about the PC. But next-gen consoles are a different story.

Quick EA it's time to finish buying Ubisoft! afterall you already own 19.9% of them.

MinionJoe:

... it's unlikely that Ubisoft is facing any kind of existential peril ...

Not unless EA or some other company uses the opportunity to enact a hostile takeover.

Take over doesn't mean existential peril either. It just means they get owned by someone else (who is more likely to eject redundant management before actually hitting the money-making parts).

Yeah, bad news is bad news.

They've most likly left themselves opened-up for the wolves to scavenge on them. If this is a good opportunity for the people, business won't be slow to react.

It was nice knowing you Ubisoft. We'll hold a wake for you when EA finally buys you out.

The Gentleman:
*Starts buying Ubisoft Stocks like mad*

Time to make some money...

Every dog has his day :P

Adam Jensen:
Yeah, AC4 will more than make up for this.

I have to agree with Total Biscuit about Watch Dogs delay. Ubisoft spent a lot of money on Watch Dogs advertising to make sure that people know about it, and to make sure that Watch Dogs is seen as the signature next-gen title. And now it's getting a significant delay. Delaying it for this long at this point means that something is seriously wrong with the game.

What's wrong is they spent so much money on advertising and not on their actual fucking game.

The Gentleman:

MinionJoe:

... it's unlikely that Ubisoft is facing any kind of existential peril ...

Not unless EA or some other company uses the opportunity to enact a hostile takeover.

Take over doesn't mean existential peril either. It just means they get owned by someone else (who is more likely to eject redundant management before actually hitting the money-making parts).

But that would mean EA would have to eject itself.

95% of PC gamers find it hard to give a shit about Ubisoft's woes. I could have told them Blacklist would be disappointing, I am a little surprised that Rayman didn't do so well.

octafish:
95% of PC gamers find it hard to give a shit about Ubisoft's woes. I could have told them Blacklist would be disappointing, I am a little surprised that Rayman didn't do so well.

Yeah on the one hand it's good they are having a bad time. I mean they alienated basically all Chaos Theory fans and have to rely on unreliable IGN kids to support them with income now that SC became an action-adventure with stealth elements thrown for good measure.

On the other hand Ubi provided us with Far Cry 3 and FC Blood Dragon both games were great. In addition Watch Dogs looks extremely promising as well as South Park The Stick of Truth, I can bear that obnoxious DRM of theirs because those games seem to deserve that. Well, time will tell.

Kumagawa Misogi:
Quick EA it's time to finish buying Ubisoft! afterall you already own 19.9% of them.

Oh god, please no :(

Maybe if they cut their marketing and sales budgets in half, perhaps they would be able to balance their overall budget. I'm pretty sure that I'm not the only one where seeing the AC4 commercial for the millionth time only makes me want the game less.

Adam Jensen:
Yeah, AC4 will more than make up for this.

I wouldn't be so sure about that...Brotherhood, Revelations, and III were all received relatively poorly. I wouldn't be surprised if ACIV suffers due to the franchise's recent history. For proof of concept, I'd direct your attention to the example of Splinter Cell mentioned in the article. I don't know that the promise of pirates and the entire game being built around one of the few enjoyable aspects of ACIII (that being naval combat) will be enough to boost ACIV sales.

I can see the Watchdogs delay possibly having an impact on retail sales too. I've heard of a few people who have cancelled their PS4/Xbone pre-orders because of the delay, me included.

GTA V taught me that I should now buy their shares...

Kumagawa Misogi:
Quick EA it's time to finish buying Ubisoft! afterall you already own 19.9% of them.

If that happens, Matt Stone and Trey Parker are gonna be more pissed off then they already are about Ubisoft getting their game...

OT: Yep, my worry about this industry continues to grow...

OH NO! BRING IN MORE REHASH! BROADEN THE APPEAL!

MAXIMUM HOMOGENIZATION!!!111

This is a worrying trend - game development costs are already through the roof and now we're adding difficult and prolonged development cycles on top of that. Console launches are already rocky, and I'm beginning to wonder if the industry can afford the next generation. Feature creep is going to be deadly - adding something later in the development cycle is going to require many more resources due to the complexity of next-gen software and difficulty of creating HD assets. That means we're going to see more recycling of assets and less iteration with each installment, on top of less risky projects so as not to hurt marketability.

Nintendo wasn't ready for HD development, which is understandable though less than acceptable - that Ubisoft, who has been making HD games for nearly a decade, isn't entirely up to snuff with powerful hardware, dozens of studios, and well-honed proprietary and third-party middleware, is a disaster.

Of course, they've likely come up with many clever solutions to the problems they face and this is just the aforementioned pre-launch jitters, but I'm still damned scared that PS4 and Xbone will fail and drag down a lot of talented developers with them.

Somebody hold me.

publisher stock investments arent something i'm interested in.
The megapublisher environment is not the hot growth sector necessary to rake cash in the long term. To the best of my knowledge, there is no dividend return, so i see more risk from underperformance of hot individual titles than systemic growth over the long term.

Activision blizzard is pretty much the norm. dead static valuation for 4 long years. Recent pops related mostly to corporate restructuring rather than growth-- and this was during the big return WoW years.

I'm genuinely shocked that Rayman Legends didn't meet sales targets, especially given it was averaging 9/10 on metacritic last time I looked, I hope that doesn't prevent future Rayman releases as there are precious few major/ AAA releases that _aren't_ aimed exclusively at adults and don't come with a 15/18 rating on them.

The Gentleman:

MinionJoe:

... it's unlikely that Ubisoft is facing any kind of existential peril ...

Not unless EA or some other company uses the opportunity to enact a hostile takeover.

Take over doesn't mean existential peril either. It just means they get owned by someone else (who is more likely to eject redundant management before actually hitting the money-making parts).

to put this mildly, EA IS EXISTENTIAL PERIL

otherwise, it's kind of true, but I worry about Atlus at night

I'll repeat this again. Ubisoft makes 3x or more money in previous years on shovelware DS(Imagine and Petz) games than on AAA. The young kid market on the 3DS is not there for Ubisoft to be making what they previously were. This just happen to coincide with the delay of Watchdogs and the other misfortunes.

So Blacklist performed poorly huh? It's not like it was a terribad game, but I can tell you why it failed: the further alienation of those who are into the series. I could tolerate the gameplay changes(and even liked a few) but the loss of Michael Ironside as Sam and Claudia Besso as Grim really hurt the game more than they'd like to admit. It wasn't even a full reboot, it was a sequel that was supposed to take place a year or so after Conviction, so having your cast suddenly de-age 10-20 years while still maintaining what relations and status they had from the previous games kinda really pisses off a bunch of people.

Now on the subject of Watch Dogs: as others have said something must've gone really wrong during development, which is why they'd push it back as far as they have. They were really banking on this one, and they'd only push it that far back if it was a major emergency. What that emergency is, exactly, is the question.

Baldr:
I'll repeat this again. Ubisoft makes 3x or more money in previous years on shovelware DS(Imagine and Petz) games than on AAA. The young kid market on the 3DS is not there for Ubisoft to be making what they previously were. This just happen to coincide with the delay of Watchdogs and the other misfortunes.

Not all the time, http://www.gamespot.com/articles/assassins-creed-ii-ships-9-million-ubisoft-posts-54-million-annual-loss/1100-6262887/

Hell they stopped making so much of the shovelware.

While I don't get what stock prices actually mean nor how it impacts actual development anyway.

Lets face it you guys did it with rayman legends, you had a finished game ready to come out at a hot time that people have been waiting for to only say " sorry guys it won't be out next month try 7 months from now" causes a damn reaction and you won't get the hype back for your game.

RJ 17:

Adam Jensen:
Yeah, AC4 will more than make up for this.

I wouldn't be so sure about that...Brotherhood, Revelations, and III were all received relatively poorly. I wouldn't be surprised if ACIV suffers due to the franchise's recent history. For proof of concept, I'd direct your attention to the example of Splinter Cell mentioned in the article. I don't know that the promise of pirates and the entire game being built around one of the few enjoyable aspects of ACIII (that being naval combat) will be enough to boost ACIV sales.

Agreed. Barring some kind of development miracle, AC4 will be the first AssCreed game i dont buy. I never even finished SC3 because it was just so damn uninteresting. The one year development cycle is really killing the franchise its just not enough time for them to create something fresh and engaging. Strip out the setting and i'd be hard pressed to tell you what was different between AC3 and Revelations, or even Brotherhood for that matter. Naval combat was the one truly new thing they came up with. Revelations/Brotherhood at least had cool stuff to climb all over and a story to tell. Boston, while realistic was also extraordinary dull, and i don't see how a series of shantytowns in the Caribbean are going to be any better. Asassins Creed is fun when your climbing all over huge builds and sneaking through crowds of people to murder someone: that means Cities. Its clear though that they don't know what their doing anymore so they're simply grabbing onto whatever flotsam still floats and trying to build a game off of it.

So sad when there are so many far more interesting opportunities.

You know that actual financial analysts attach a disclaimer to their stock purchasing advice for a reason, right Andy? Protect yoself.

SecondPrize:
You know that actual financial analysts attach a disclaimer to their stock purchasing advice for a reason, right Andy? Protect yoself.

Awesome news dude though I may be, I don't think that puts me in a position where any advice I give - particularly with regards to stock performance analysis - needs to be accompanied by a disclaimer. Besides, I'm just sayin', y'know? _

Interesting point, though: Could this actually present a threat to the long-term viability of Ubisoft? Lots of people have said that the money isn't lost, it's just moved to the next fiscal year, but the problem with that is that this fiscal year is unique. Not only is Ubi missing the holiday quarter, which despite the idiotic overcrowding is still the place to be for a major new game release, but it's also missing the biggest console launches ever - and while holiday quarters come around every year, new console cycles do not. Think about this: You may not even be in high school yet and it's quite likely that you'll have graduated from college before it happens again. This particular quarter is invaluable, and Ubisoft is blowing it.

So instead of coming up with the next AssCreed, Watch Dogs comes out in spring 2014 in the midst of a heavy console launch hangover and becomes the next, I dunno, Alpha Protocol instead. The Crew disappears in a puff of obscurity (which is almost certainly going to happen anyway, so no real loss) and after big promises, a humiliating PR stepdown and bazillions of dollars lost, Watch Dogs ends up a one-off and Ubisoft, which has bet heavily on mega-blockbuster franchises, basically loses a leg and has nothing to show for it.

I don't think EA has the muscle for it right now, but could Activision be giving it the eyeball in a couple years? Or maybe another company like Vivendi that wants to make a ready-to-eat entry into the business?

Andy Chalk:

SecondPrize:
You know that actual financial analysts attach a disclaimer to their stock purchasing advice for a reason, right Andy? Protect yoself.

Awesome news dude though I may be, I don't think that puts me in a position where any advice I give - particularly with regards to stock performance analysis - needs to be accompanied by a disclaimer. Besides, I'm just sayin', y'know? _

Interesting point, though: Could this actually present a threat to the long-term viability of Ubisoft? Lots of people have said that the money isn't lost, it's just moved to the next fiscal year, but the problem with that is that this fiscal year is unique. Not only is Ubi missing the holiday quarter, which despite the idiotic overcrowding is still the place to be for a major new game release, but it's also missing the biggest console launches ever - and while holiday quarters come around every year, new console cycles do not. Think about this: You may not even be in high school yet and it's quite likely that you'll have graduated from college before it happens again. This particular quarter is invaluable, and Ubisoft is blowing it.

So instead of coming up with the next AssCreed, Watch Dogs comes out in spring 2014 in the midst of a heavy console launch hangover and becomes the next, I dunno, Alpha Protocol instead. The Crew disappears in a puff of obscurity (which is almost certainly going to happen anyway, so no real loss) and after big promises, a humiliating PR stepdown and bazillions of dollars lost, Watch Dogs ends up a one-off and Ubisoft, which has bet heavily on mega-blockbuster franchises, basically loses a leg and has nothing to show for it.

I don't think EA has the muscle for it right now, but could Activision be giving it the eyeball in a couple years? Or maybe another company like Vivendi that wants to make a ready-to-eat entry into the business?

It's not only after the launch window but after the holiday season as well so they'll lose out on sales to people who spent their cash during the holidays. It's not a matter of qualifications for giving financial advice though considering your job it's not far fetched to make the case that you may know what you're talking about here, it's actually giving it, which you appear to do.

DVS BSTrD:
What's wrong is they spent so much money on advertising and not on their actual fucking game.

Didn't you hear? It's a blockbuster-driven business for Ubisoft. And you can't have a blockbuster without coverage.
...Or so the suits say.

An insanely competitive advertising market is partially to blame, as the difference between getting "Any coverage" and "No coverage" is apparently pretty expensive depending on the avenues you go through. (indie titles largely rely on word of mouth for this reason, though with social media, it's arguably less necessary to do traditional advertising than ever)

But methinks they're also paying for starting advertising WAY WAY TOO EARLY, which by necessity, will eventually translate into WAY TOO OFTEN as they're going to lose a lot of buzz by not launching amidst the commercial chaos of Christmas and will probably have to run another series of overpriced ads again later (though with the benefit of not having to pay the Christmas season markup. I shudder to think what it costs to advertise on anything that matters during Christmas).

For Ubisoft to jump not only Christmas, but a Double-Barrel Console Christmas (with consoles that actually matter)...
...Yeah, small wonder shareholders are selling. It's not just that they will "make up for it" later, it's that they're basically skipping the best time of the year to sell their games in what could be a banner year on top of that.

There's a reason every AAA publisher completely ignores most of the year (fucking Summer game droughts...) and waits to bring every big title to bear in Oct-Dec.

Both games "experienced lower sales" because Ubisoft often has an insanely unrealistic perception of how much new games based on popular IPs will net. Square did the same thing with Tomb Raider, believing it would rake in the same amount as it's inspiration, Naughty Dog's Uncharted, if not more because it was Lara's reboot. The game did respectable sales, but Square chalked it up in their investment report as a failure because their math figures as to how much it would rake in were so bewilderingly off.

Splinter Cell: Blacklist was a phenomenal game that, much like TR, sold respectable numbers and was almost universally praised by critics and gamers alike (some didn't care for it, but that's always the case with Splinter Cell when it's not a clone of Chaos Theory) for not only getting it's mechanics right, but having a pretty damn cool "Tom Clancy" espionage plot that, for me, felt like a cross between the Bourne series and Strike Back. On top of that the acting/performance capture was outstanding and the new Sam Fisher put, IMHO, Michael Ironside to shame.

It was just *good*. It really burns my ass to know that, judging by how Ubisoft traditionally handles games that "underperform", we're not likely to get another Splinter Cell game that would essentially be a sequel to Blacklist. I really wanted to see those same characters and actors return in the same capacity, using the same mechanics with just a new story.

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