Ubisoft: Slightly more negative picture

I think we’re all aware at the recent wave of short comings, game launch delays and back catalogue issues Ubisoft have been facing but digging in to their recent financials I think it showcases a slightly more negative view then expected:

• Financial Performance: In Q3 FY2024-25, Ubisoft reported net bookings of €301.8 million, a 52% decline from €626.2 million in the same period last year, aligning with its revised guidance. Ultimately even though they set guidance correctly, seeing such a YoY decrease shows increasing pressures and an even bigger ownous on future releases (which we all know is going to be pinned to AC: Shadows).

• Assassin’s Creed Shadows Release: Despite previous setbacks, “Assassin’s Creed Shadows” is now scheduled for release on March 20, 2025, with pre-orders tracking comparably to “Assassin’s Creed Odyssey,” the franchise’s second most successful entry. My gut feeling is that the title won’t be delayed further as the company needs something out, but I am going to take a swing now and say whilst current orders are looking decent Metacritic and industry reviews will be lacklustre and the game will struggle post launch.

• Operational Challenges: The company has faced underperformance in key titles, leading to a strategic review of its assets and franchises to maximize stakeholder value. This again has been apparent by the killing of some other projects (new IP) and the announcement of launching a new AC game YEARLY.

• Cost Reduction Initiatives: Ubisoft aims to exceed €200 million in fixed cost reductions by FY2024-25 compared to FY2022-23, ahead of schedule, as part of its efforts to improve financial stability. How they get to this without big cuts and layoffs is a seemingly unknown, so something to definitely keep an eye on.

• Strategic Review: An independent board committee is overseeing the exploration of various strategic and capital options to enhance the value of Ubisoft’s assets and franchises. This also comes after the news of a potential buyout a few months ago, who knows if we will finally see Tencent make their move!

Again, a slightly more negative picture, a lot riding on AC: Shadows, not enough on mobile, quieter times about the Tencent acquisition but if the stock keeps going down will this force something to happen after all?