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Ubisoft Shares Plunge 20% as Game Delays Increase Cash Burn

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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:

  • Ubisoft now expects to break even in operating profit for the fiscal year ending March 2026.

  • Net bookings for the current fiscal year (to March 2025) fell by 20.5%, due to both delayed releases and underperformance of major titles.

  • 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:

  • The much-anticipated Assassin’s Creed: Shadows has been delayed multiple times.

  • Star Wars Outlaws, another flagship title, received a lukewarm reception.

  • 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.

Ubisoft Delays ‘Assassin’s Creed Shadows’ Release Again

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Ubisoft has announced a further delay in the release of Assassin’s Creed Shadows, pushing the launch from February 14 to March 20. This marks the second delay for the highly anticipated game in the Assassin’s Creed series, with the original release date being set for November before being postponed in September.

The additional month will allow the development team more time to incorporate player feedback from the previous months, aiming to refine the game further before its official release. Ubisoft has highlighted that the feedback from the Assassin’s Creed community has been increasingly positive, and the extended time will help to ensure the best possible launch conditions.

This delay adds to Ubisoft’s recent struggles, which include a disappointing reception for Star Wars Outlaws, released in August 2024, that did not meet sales expectations. As a result, Ubisoft’s shares have halved in value over the past year.

Additionally, Ubisoft revealed plans for significant restructuring after a strategic review, including appointing advisers to explore options for improving stakeholder value. The company aims to reduce its fixed cost base by more than €200 million by FY2025-26 and take a more selective approach to investments.

For the third quarter, Ubisoft forecasts net bookings around €300 million, a significant drop from earlier projections due to weak holiday sales and the discontinuation of XDefiant.

 

Assassin’s Creed Shadows Pushed to February 2025, Season Pass Scrapped Following Fan Criticism

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Ubisoft stated that while the game had reached a feature-complete stage, they decided to extend the timeline to enhance its overall quality. Devamını Oku