# Ubisoft shares slump 20% after French video game maker warns on revenue
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-01-12
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Ubisoft shares drop 20% as game delay hits revenue
Meta Description: Shares in Ubisoft drop after revenue warning, pushback of 'Skull and Bones' release, and analyst downgrades. Discover more here.
URL: https://financedigest.com/ubisoft-shares-slump-20-after-french-video-game-maker-warns-on-revenuehtml

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By Dominique Vidalon

PARIS (Reuters) -Shares in Ubisoft fell 20% on Thursday after the French video game maker warned on revenue and postponed the release of its game “Skull and Bones”, prompting analysts to cut their estimates and price targets.

Late on Wednesday, Ubisoft said that it was increasing its writedown estimate to 500 million euros ($538 million) from 400 million and cutting its full-year revenue target after ending 2022 with weaker-than-expected sales.

Ubisoft cited the deteriorating economy, marked by lower spending on non-essential goods.

JP Morgan analysts in a note [cut their rating](https://www.financedigest.com/ecb-raises-interest-rates-again-cuts-bank-subsidies.html "ECB raises interest rates again, cuts bank subsidies") on Ubisoft to “neutral” from “overweight”, citing “a weakening macro, a challenging industry environment and the lack of visibility regarding the timing of releases and their potential success.

Several analysts noted that another negative factor was a shift in the [video game](https://www.financedigest.com/video-game-maker-cd-projekts-first-half-profit-beats-expectations.html "Video game maker CD Projekt’s first-half profit beats expectations") industry towards mega-brands and away from small and mid-tier games.

“We have felt for several years that Ubisoft was devoting far too much money towards non A-tier franchises (such as Skull & Bones)”….Macro or not, there is still plenty of room for big [performance if you have the right product..](https://www.financedigest.com/panasonic-delays-production-of-new-tesla-battery-to-improve-performance.html "Panasonic delays production of new Tesla battery to improve performance").Ubisoft clearly needs to refocus its efforts,” Cowen analysts wrote.

They reiterated their “market perform” rating on Ubisoft and [cut their price](https://www.financedigest.com/tesla-posts-record-quarterly-deliveries-after-price-cuts-up-4-from-q4.html "Tesla posts record quarterly deliveries after price cuts, up 4% from Q4") target to 22 euros from 34 euros.

Morningstar analysts [cut their fair value estimate on Ubisoft to 35 euros](https://www.financedigest.com/carrefour-unveils-30-euro-shopping-basket-in-spain-after-government-price-cut-proposal.html "Carrefour unveils 30 euro shopping basket in Spain after government price cut proposal") from 60 euros “to account for the revenue drop, lower top-line growth, and potential further game delay

Ubisoft [shares were down 19.48% at 19.38 euros](https://www.financedigest.com/mercedes-benz-to-buy-back-up-to-4-billion-euros-in-shares-by-2025.html "Mercedes-Benz to buy back up to 4 billion euros in shares by 2025") as of 0808 GMT.

(Reporting by Dominique Vidalon, Pitr Lipinski; editing by Benoit Van Overstraeten and Jason Neely)


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