Ubisoft faces one of the biggest crises in its history


Ubisoft faces one of the biggest crises in its history
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Game News Ubisoft faces one of the biggest crises in its history

This week, the French video game giant made the headlines. What the markets anticipated in recent days has finally happened: Ubisoft will not be able to meet its objectives. In the process, the giant announces the postponement of one of its big releases in 2023 and the cancellation of three projects that have not yet been announced. With a share whose value is melting like snow in the sun and various strategic concerns, the company is facing what seems to be one of the biggest crises in its history.


  • Unattainable goals
  • A problem that is both macroeconomic and strategic
  • Is the vital prognosis engaged?

Unattainable goals

On January 11, 2023 after the closing of the Paris Stock Exchange, Ubisoft published a press release on its space dedicated to investors a warning on its annual results for the 2022-23 financial year ending at the end of March. While he hoped to reach 400 million euros in profit in his operating results, it is finally a loss of 500 million euros that Rayman’s dad is now considering.. Turnover (qualified as net bookings at Ubisoft), initially forecast to be up 10%, should meanwhile be down 10%. In other words: the figures are disappointing – not to say bad – but not surprising. Indeed, the financial markets had anticipated this profit warning since the stock had lost 12.30% of its value during the 5 days preceding the announcement. The first (unsatisfactory) estimates of the sales of Mario + The Rabbids Sparks of Hope as well as the profit warning from the British developer Frontier (F1 Manager 2022, Jurassic World Evolution 2) had effectively scalded the shareholders of the brand to the spiral .

By way of explanation, the French publisher cited an unfavorable economic climate and the underperformance of its year-end hits, Mario + The Rabbids Sparks of Hope and Just Dance 2023.”Amid deteriorating macro conditions, trends over the holiday season, particularly the last weeks of December and early January, were significantly and surprisingly slower than expected.”explains the press release. Before adding:despite excellent ratings and player reception as well as an ambitious marketing plan, we were surprised by the underperformance of (our games)”.

Ubisoft faces one of the biggest crises in its history

A problem that is both macroeconomic and strategic

Admittedly, the global economic situation is complicated for the big names in entertainment. In a context of accelerating inflation that is punishing households, gambling spending is an immediate potential target in times of economic sluggishness, as Karol Severin of MIDiA Research states. The 2022 figures for the video game industry are a little worse than those of 2021 partly due to the unstable economic climate, but also the war in Ukraine and the disruptions encountered in the Chinese market.

Ubisoft faces one of the biggest crises in its history

What has caused harm to the group belonging to the Guillemot family is also and above all more or less recent choices which have proved to be poorly paid in 2022. The shift towards China taken by the company – with its studios located in Shanghai and Chengdu; its partnership with Tencent to strengthen its position in mobile, particularly in China; the development of a free-to-play Assassin’s Creed designed for the Chinese market and taking place in China – does not reassure investors. The Xi Jinping government is indeed waging a battle against this qualified entertainment”opium of the mind” by the official Chinese daily with various measures ranging from the time limit to play to the boycott of foreign games. In general, Ubisoft’s numerous free-to-play games are struggling to ignite the crowds: Hyper Scape has closed its doors, the development of Ghost Recon Frontline has been interrupted, and Roller Champions is struggling to find the general public. It remains to be seen if the upcoming free-to-play XDefiant and Tom Clancy’s The Division: Heartland will manage to reverse the trend.

Ubisoft faces one of the biggest crises in its historyUbisoft faces one of the biggest crises in its history

Has the best become the enemy of good at Ubisoft? With a lot of very ambitious games in the pipeline, like Massive’s Star Wars, Avatar: Frontiers of Pandora or Beyond Good & Evil 2 – a titanic project that we haven’t heard from for almost two years – the editor does not make it easy for himself. Especially since consumer expectations, like the investments allocated to production, are growing.

Ubisoft faces one of the biggest crises in its historyUbisoft faces one of the biggest crises in its history

The company to which we owe the Far Cry half-acknowledges its problems in meeting deadlines. “Our strategy over the past 4 years has been to create persistent Live games and adapt our strongest franchises”explains the company. She adds : “however, games from this phase of investment have yet to launch, while our recent launches have not delivered the expected results”. In order to reassure shareholders, Yves Guillemot promises that “the industry’s long-term outlook remains bright” and “that Ubisoft will be well positioned”. During its 2023-24 fiscal year, the French giant wants to launch at least three blockbusters with Skull & Bones, Assassin’s Creed Mirage and Avatar: Frontiers of Pandora. How to restore color to the brand? “With more selective players, launching four big releases in the same year as Ubisoft plans for 2023-2024 poses a risk of cannibalization between titles” warns Valentin Mory, analyst at AlphaValue for BFM Stock Exchange.

Is the vital prognosis engaged?

Of course, the long dive of the Ubisoft title challenges. In January 2021, the group’s share price exceeded 80 euros. Today, the title is trading around 21 euros on the Paris Stock Exchange, a drop of almost 73%, its lowest level for almost 7 years. In 12 months, the price has fallen by more than 54%. Aware of the challenges that await the company in the coming months, Yves Guillemot and his teams have presented two major avenues for improvement. The first is to bet on carrier licenses rather than on other potentially riskier projects. Ubisoft also explains that the cancellation of three still unannounced projects will allow the group to disperse less. The second is to start “targeted restructuring” to “adapt the organization to a more difficult market” which will free up 200 million euros over the next two years. For the moment, no social plan has been mentioned by the leaders.

Ubisoft faces one of the biggest crises in its history

On the side of the analysts, it is generally grimace soup. “This warning shows that the company has structural problems and seriously undermines the company’s credibility vis-à-vis investors. She may struggle to win it back over the next few months.“, warns Valentine Mory. Financial institutions such as Morgan Stanley, Wells Fargo, Cowen, Deutsche Bank, Barclays, Wedbush and Citi are lowering their price target in unison. Nonetheless, they mostly note that there is genuine upside potential, deeming the stock “cheap”. Against winds and tides, TP ICAP Midcap estimated that Ubisoft “definitely has the ability to bounce back” and maintains its price target. Yves Guillemot, he believes in it. He promises that his society will experience “strong growth in net bookings and operating income over the next few years”.

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