- Ubisoft shares have declined by over 30% since the recent reorganization announcement.
- The company unveiled a major restructuring initiative and cancellation of several projects.
- If the losses hold, the company is on track for the worst one-day drop since going public.
Ubisoft swept the gaming industry with massive announcements recently in order to hit a hard reset button. The company has shut down multiple studios, cancelled six games, including the Prince of Persia remake, and reportedly delayed the Black Flag remake.
The publisher will now focus on open-world and live-service games while turning its tentpole IPs into annual billionaire brands. Regardless, these reorganization efforts come at a massive cost, as the company’s stock has plunged by over 30% in just a single day.
Why it matters: The staggering decline shows that there’s a lot of uncertainty regarding Ubisoft’s future, especially after its major unexpected reorganization efforts and cancellation of several titles.
The shares dropped by over 31%, leading to losses on the SBF 120 index. If these losses hold, Ubisoft is on a grim path to suffer the largest single-day drop since it went public back in 1996. At the time of writing, the shares are being traded at 4.54 euros.
Ubisoft is now forecasting an operating profit loss of roughly a billion euros, which is a far cry from its earlier plans to break even. The €650 million comes directly from game cancellations and delays.
The publisher’s net bookings forecast stands at €1.5 billion for the fiscal year, signaling that sales could be 20% less than what was expected before. Ubisoft also wants to reduce costs by €200 million over the next two years.
The company has split into five ‘creative houses,’ each of which has its own separate budget. These creative houses will focus on different genres and popular IPs. While this may have a positive outcome in the future, the sudden financial impact is too severe to ignore.
Ubisoft stocks have also declined massively before this reorganization, going down by nearly 90% in the last five years.
Do you think Ubisoft will be able to recover and get back on its feet after the major upheaval settles in the industry? Let us know your thoughts in the comments below, or join the discussion on the Tech4Gamers forum.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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