by Pauline Foret

(Reuters) – Ubisoft on Wednesday revised its financial targets for the second quarter and full year, citing a performance that fell short of expectations.

The French video game producer now expects net bookings for the second quarter of between 350 and 370 million euros.

It had previously targeted around 500 million euros, according to its first-quarter results statement.

For the full year, the group forecasts net bookings of 1.95 billion euros, while it previously expected “solid growth” after 2.32 billion euros in 2023.

For the 2024-2025 financial year, Ubisoft also forecasts non-IFRs operating income and free cash flow close to breakeven.

Ubisoft’s previous guidance had already raised investor concerns in July, sending the stock tumbling. “The guidance for the second quarter is so low that it has to be conservative,” a JP Morgan analyst said at the time.

After publishing its first quarter results, the group announced that its net bookings would be supported by a cost reduction plan.

“We could continue our cost reduction plan, with a constant reduction in our workforce over the first half (of fiscal year 2025),” said the group’s financial chief, Frederick Duguet, during a conference with analysts.

REVIEWS OF HIS LATEST GAMES

Widely criticized since the release of its game Star Wars Outlaws, the group has also announced that it is mobilizing its teams to develop updates, adding that the game will be available on the Steam platform from November 21.

Since the game’s release, Ubisoft’s stock has lost more than 20%, reaching its lowest level in ten years.

The launch of its next game, Assassin’s Creed Shadows, has been postponed to February 14, 2025, with the group citing a desire to avoid the same mistakes as its previous launch.

Analysts were already expecting the game’s performance to come under considerable pressure due to the mixed reception of Star Wars Outlaws.

(Written by Pauline Foret with Matthias de Rozario, edited by Kate Entringer)

Copyright © 2024 Thomson Reuters