Ubisoft It canceled three unannounced games on Wednesday and slashed its full-year financial goals, blaming “deteriorating macroeconomic conditions” plaguing the video game industry.
The French gaming house said it expects net bookings for 2022 to reach 725 million euros ($779.4 million), below the previous target of 830 million euros.
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The company cited the poor performance of its Mario + Rabbids Sparks of Hope and Just Dance 2023 titles, as well as the difficult economic environment.
For the full year, Ubisoft said it expects 2022 net bookings to drop 10%. The company previously expected net bookings to grow by 10%.
“It is clear that we are disappointed with our recent performance,” Ubisoft CEO Yves Guillemot said in a statement. “We are facing conflicting market dynamics as the industry continues to shift towards mega brands and always-on live gaming, amid worsening economic conditions affecting consumer spending.”
Faced with higher prices and higher borrowing costs, consumers are reducing their discretionary purchases. Games in particular have been under pressure.
Global sales of games and services, including PC and console games, are expected to shrink 1.2% year-over-year to $188 billion in 2022, according to a July research note from data firm Ampere Analysis market.
With an industry vision of increasing consolidation, analysts see Ubisoft as a potential acquisition target. Its share price fell more than 38% in 2022, wiping €3 billion off the company’s market value.
During this time, internal scandals also haunted the company. Ubisoft underwent a change of direction in 2020 after reports of sexual harassment and assault. Several executives have resigned, including former creative director Serge Hascot.
Michael Pachter of Wedbush Securities said Ubisoft’s collection of holiday games “isn’t good enough to grab attention”. He said he expects improvement with upcoming games like Avatar, Assassin’s Creed, and Skull & Bones, “but they couldn’t deliver that with Mario + Rabbids this year,” he said. he told CNBC via email.
In September, the Chinese tech giant Tencent Increased stake in the company. Tencent has invested 300 million euros in Guillemot Brothers Limited, taking a 49.9% stake in the family investment company that owns 15% of Ubisoft.
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