Game On: Ubisoft cuts financial targets after ‘Assassin’s Creed Shadows’ delay

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

UBISOFT UPDATE: Last week, Ubisoft (UBSFY) announced that its upcoming action-adventure title “Assassin’s Creed Shadows” has been delayed to February 14, 2025, from its previous release target of November 15, 2024. The company said it needs “more time to polish and refine the experience, pushing further” certain key features. The news come along an announcement that initial sales of the company’s previous major release “Star Wars Outlaws” were “softer than expected.”

As a result of the updates, the game maker updated its financial targets for FY2024-2025, with the company now expects net bookings of around EUR1.95B, and around break-even non-IFRS operating income and free cash flow. The company also now targets FY2024-2025 net bookings for the second quarter FY2024-25 to stand at around EUR350M-EUR370M. The Fly notes that Ubisoft reported FY2023-2024 net bookings of EUR2.32B, and recently guided for Q2 net bookings of roughly EUR500M.

Following the news, multiple analysts lowered their price targets on the shares, with Deutsche Bank even downgrading the stock to Hold from Buy, saying the magnitude of the “Assassin’s Creed Shadows” delay is “disappointing.” Meanwhile, Benchmark earlier this week downgraded Ubisoft to Hold from Buy with no price target, citing ongoing execution issues. The delay of “Assassin’s Creed,” Ubisoft’s top franchise, is “particularly concerning,” as it raises doubts about the game’s direction, while these challenges taken together suggest “deeper systemic problems within the company” that are now impacting its top franchises and licensed intellectual properties, the analyst told investors.

Click here to check out recent Media Buzz Sentiment on Ubisoft as measured by TipRanks.

EPIC GAMES ACCUSATIONS: Epic Games has accused Google (GOOGL) and Samsung (SSNLF) of conspiring to protect Google’s Play store from competition, Reuters’ Mike Scarcella and Supantha Mukherjee (TCEHY), KKR (KKR), Disney (DIS), and Sony (SONY).

EUROPE AUGUST GAME SALES: 11.8M console and PC video games were purchased across Europe last month, an increase of 7% year-over-year, Gamesindustry.biz’s Christopher Dring (TTWO) “Grand Theft Auto V,” which ended the month in the top spot, Dring said, noting that Ubisoft’s “Star Wars Outlaws” was the second-best seller in its debut month. Despite falling in second place, it was a disappointing launch for “Outlaws,” which first week sales less than half of what EA’s (EA) “Star Wars Jedi: Survivor” did in 2023, Dring added. Other top-selling games in Europe in August, according to GSD, were Warner Bros. Discovery’s (WBD) “Hogwarts Legacy,” Deep Silver’s “Kingdom Come: Deliverance,” EA’s “EA Sports FC 24,” and Take-Two’s “Red Dead Redemption 2.

MORE VIDEO GAME NEWS:

• At a (NTDOY) latest Switch exclusive game “The Legend of Zelda: Echoes of Wisdom” debuted in second place in the U.K. physical charts this week, GI.biz reports
• Sony’s PlayStation Network said Tuesday that some services are “experiencing issues”
• The PlayStation 5 Pro has not sold out yet in the U.S. or U.K. after pre-orders for the upgraded console started last week, Verge reports
• Microsoft (MSFT) combined its Xbox Game Pass app and Xbox mobile app