Ubisoft Misses Sales Estimates on Thin Video-Game Pipeline

(Bloomberg) -- Ubisoft Entertainment SA reported revenue that missed analysts’ estimates as the company struggled to keep up a pipeline of new games during the pandemic. 

The French gaming studio, which publishes popular titles including Assassin’s Creed, posted third-quarter revenue of 665.9 million euros ($757 million), down 31%. That was below the average analyst estimate of 825.3 million euros, according to data compiled by Bloomberg.

Microsoft Corp.’s planned $69 billion acquisition of Activision Blizzard Inc. last month sparked speculation that Ubisoft could be a potential acquisition target, amid rising interest in gaming and the metaverse from tech giants.

Key Insights

• Net bookings were 746.1 million euros, down 25% from a year earlier and missing analysts’ estimates for 788.4 million.
• The company reiterated full-year bookings target of unchanged to “slightly down” and non-IFRS operating income target of 420 million euros to 500 million euros.
• Ubisoft has turned an Assassin’s Creed expansion into a stand-alone game to help fill out its thin release schedule, Bloomberg reported this month.
• Ubisoft expects 2023 to be a comeback year, with highly anticipated projects related to Avatar and Star Wars.
• Ubisoft started to experiment with nonfungible tokens in December, allowing players to buy and sell accessories like helmets or rifles as NFTs on a dedicated platform called Quartz. The move was criticized by fans and employees.
• The company is set to continue to launch big-budget blockbusters like titles in the Assassin’s Creed series, but said last year that it wants to prioritize free-to-play versions of its successful video game franchises like Tom Clancy’s The Division.
• Tom Clancy’s Rainbow Six Siege reached 80 million unique active players, adding 10 million players over the past twelve months.

Market Context

• Ubisoft shares are down 40% in the past 12 months.

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