Following the disappointing performance of Ghost Recon Breakpoint and The Division 2, Ubisoft cut its full-year net bookings forecast from €2.19 billion to €1.45 billion. This caused company stock to fall by 29 percent, according to Bloomberg. Project operating income was at €480 million, but this was also reduced to between €20-€50 million.
Much of the blame was placed on a “sharp downward revision” of revenue that Ghost Recon Breakpoint was expected to generate. The Division 2 contributed to a less extent, but as Ubisoft CEO Yves Guillemot pointed out yesterday, both titles under-performed (with Ghost Recon Breakpoint ending up “significantly below [Ubisoft’s] expectations,” as per Guillemot).
Guillemot noted in an analyst call, “We didn’t fully deliver on both games.” CFO Frederick Duguet added that the company had to “elevate” its games’ quality more, which led to the delay of Watch Dogs Legion, Rainbow Six: Quarantine, and Gods and Monsters to the next fiscal year. Skull and Bones, the multiplayer naval combat title, was also postponed to 2022.
Berenberg analyst Robert Berg stated, “It will clearly take some time for confidence to return. Although it must have been a very tough decision, we believe management is doing exactly the right thing by delaying these games.”
Mirabaud Securities analyst Neil Campling noted, “Investors will be frustrated with recent developments, and rightly so. But by ensuring that the future releases are given a closer focus on quality – and then timed for the following fiscal year, when the additional catalyst of the next generation of consoles will be with us, then this misstep now could turn into a well-timed opportunity ahead.”
The Division 2 reviewed favorably upon launch, though the reception on certain mechanics and updates since release has been mixed. On the other hand, Ghost Recon Breakpoint was panned upon release. Time will tell how Ubisoft can reverse its fortunes, so stay tuned for more details.
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