(Bloomberg) -- A profit warning and delayed game release from Ubisoft Entertainment SA that sent shares of the French video-game maker to a decade low has prompted an out-of-the-ordinary outburst of criticism from analysts.
TD Cowen’s Doug Creutz said the company’s board doesn’t appear to be taking the steps needed to hold management accountable for “repeated failures.” According to Citigroup Inc.’s Thomas Singlehurst, the news “further undermines the group’s reputation with regard to execution,” while Eric Ravary at CIC Market Solutions said it “can only damage the stock’s status for a long time to come.”
These comments came as the French video-game producer reduced its bookings guidance and said the recently released Star Wars Outlaws underperformed, while delaying the highly anticipated Assassin’s Creed Shadows game to February from November.
Shares on Thursday declined as much as 21% to the lowest levels since 2013.
Ubisoft has suffered a string of production disruptions since the pandemic. XDefiant, a free-to-play shooter game released in May, was initially scheduled for last year. Naval battle game Skull & Bones was delayed six times before its February launch and only met with mixed reviews among critics, according to review site Metacritic.
Under Pressure
Ubisoft hit back at the criticism, with a spokesperson saying the board of directors “believes our strategy is sound and that a profound transformation of the company is already underway and progressing. The board is overseeing the executive committee’s review aimed at further improving our execution and accelerating our strategic path toward a more focused model.”
The company is also under pressure from Slovakia-based hedge fund AJ Investments, which in a letter earlier this month said the company should start a sale process. The fund, which holds less than 1% of Ubisoft, said it has support of 10% of shareholders, Reuters reported Thursday.
“Ubisoft has a high-quality game IP and talented developers,” Creutz said. “Despite that, the last six years have been an almost non-stop parade of game delays, followed by game launches that are still undercooked, as well as misallocation of capital to games that probably never should have been green-lit in the first place.”
--With assistance from Benoit Berthelot and Kwaku Gyasi.
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