Ubisoft Entertainment (OTC:UBSFF, EPA:UBI) shares crashed another 20% lower after the computer games developer issued a profit warning on the back of a problem-strewn start for its Star Wars Outlaws game, also hitting the timing of its next big release.
The French company, best known as the maker of Assassins Creed, said it now expects net bookings of around €1.95 billion, and "around break-even" in terms of profit and free cash flow, with net bookings for the second quarter standing around €350-370 million.
Following the criticism of the Star Wars Outlaws game, which was beset by in-game bugs and mixed reviews, the release of Assassin’s Creed Shadows will now be pushed back to Valentine's Day next year as the company said it was taking "additional time to further polish the title".
It said it is also departing from its "traditional season pass model", with all players to be able to enjoy the game at the same time on February 14 and those who preorder the game will be granted the first expansion upgrade for free.
This could be another sizeable pivot from the company as its pursuit of a live service gaming model has left gamers fed up with Ubisoft constantly raiding their wallets.
Co-founder and CEO Yves Guillemot said the second quarter performance "fell short of our expectations, prompting us to address this swiftly and firmly, with an even greater focus on a player-centric, gameplay-first approach and an unwavering commitment to the long-term value of our brands".
He said the recent issues led the board to "acknowledge the need for greater efficiency while delighting players" and so a review is being carried out "aimed at further improving our execution, notably in this player-centric approach, and accelerating our strategic path towards a higher performing model to the benefit of our stakeholders and shareholders".
Responding to recent criticism of Ubisoft, Guillemot said "We are an entertainment-first company, creating games for the broadest possible audience, and our goal is not to push any specific agenda".
Analysts at Citi said the news was a "triple whammy", confirming that Star Wars Outlaws has had a difficult start, the delay to Assassin's Creed Shadows, and the sharp reduction in full-year guidance.
"This will, in our view, confirm the market's worst fears about Ubisoft's prospects," the analysts added. "That said, the shares have already declined c.50% YTD (virtually all of which is over the past 3 months), so some of this will likely have been discounted."
The shares fell to almost €9 on Thursday, having started the year at around €23.50.