Ubisoft shares tumbled nearly 20% on Thursday, marking the company’s biggest single-day drop in over a decade, after the French video game maker announced it would burn more cash to extend development timelines for major titles.
In an earnings statement, CEO Yves Guillemot revealed that Ubisoft is allowing “additional development time to some of our biggest productions,” which will push the release of significant content into the next two years. The move, while aimed at improving game quality, has rattled investor confidence.
Key Financial Outlook:
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Ubisoft now expects to break even in operating profit for the fiscal year ending March 2026.
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Net bookings for the current fiscal year (to March 2025) fell by 20.5%, due to both delayed releases and underperformance of major titles.
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The company aims to return to positive cash flow next year, but analysts are skeptical.
Barclays analysts had projected €96 million in free cash flow this year, but said Ubisoft’s latest guidance falls “well below” expectations. “Investors will believe in the free cash flow when it is in front of them,” the bank noted.
Game Performance and Delays:
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The much-anticipated Assassin’s Creed: Shadows has been delayed multiple times.
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Star Wars Outlaws, another flagship title, received a lukewarm reception.
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Morningstar analysts expressed doubt that Shadows will be enough to turn Ubisoft’s fortunes around in 2026, given the current outlook.
To manage soaring development costs, Ubisoft has launched a joint venture with China’s Tencent, targeting the production of blockbuster franchises such as Assassin’s Creed, Far Cry, and Rainbow Six.
Despite long-term hopes pinned on these franchises, the short-term outlook remains bleak. By 08:23 GMT on Thursday, Ubisoft shares were down 19.5%, putting the company on track for its sharpest decline since 2013.