“Avatar 2” hits theaters this Christmas. Also, by announcing the postponement of the release of its game “Avatar: Frontiers of Pandora”, Ubisoft will not benefit from all the commercial fervor around James Cameron’s new film, contrary to the plan which was initially its own.
The publisher (-4.4% on the stock market at the lowest of the day) initially aimed to launch its new opus, tipped as a future blockbuster, at the end of this year to accompany the cinema release of the American blockbuster but, finally , due “of the current constraints imposed on the productions of the entire sector” in a post-Covid context (telework in particular which lowers productivity), this open world will only be launched during the next fiscal year, between April 2023 and March 2024.
The video game industry is also in the midst of a growth crisis, in particular because, while waiting to be able to buy a new generation console (PS5 for example), players are buying fewer games for older generation consoles.
At Deutsche Bank, analyst George Brown, who is holding a buy advice on the value, to aim for 60 euros, now plans an exit in the third quarter, for the holiday season of 2023. “The impact of the game’s delay and some anticipation of macroeconomic headwinds mean that net bookings [l’équivalent du chiffre d’affaires, qui correspondent aux ventes nettes excluant certains revenus différés] for FY23 (through March) are now expected to grow 10% (from 20% previously)”deplores the analyst.
But finally, “the longer the group’s operational difficulties last, the more the question of maintaining its independence will arise”, which confirms the speculative attraction that surrounds the company on the stock market, believes, for his part, analyst Emmanuel Matot, of the private bank Oddo BHF. He also recommends buying Ubisoft shares (target price reduced from 57 to 55 euros).
Stopping the “Ghost Recon Frontline” project
Although the company’s management has halved its growth forecasts for this year, the profit targets have been confirmed: it still anticipates adjusted current operating income close to 400 million euros (it was 407.6 million in fiscal year 2021-22). “This announcement may seem surprising,” do we comment at Oddo BHF, where we explain this absence of profit warning “especially by a payment up front significant linked to the signing of a new partnership of licensing on mobile for one of its AAA brands [note de l’industrie qui désigne les superproduction, cher à produire, mais avec un gros potentiel commercial]. The group also announces an optimization of its cost base (stabilization of the workforce, strict discipline on expenses, discontinuation of projects such as “Ghost Recon Frontline”…) and will also benefit from the favorable evolution of currencies. »
In the first quarter – insignificant in the absence of the release of big games – the creator of the successful franchise “Assassin’s Creed” generated net bookings of 293.3 million euros, down 10% over one year. , where the group had announced a target of around 280 million euros. The public welcomed the free-to-play game “Roller Champions”, but most of the revenue comes from the back catalog. Ubisoft speaks of solid performances for “Rainbow Six Siege” and for the “Odyssey”, “Origins” and “Valhalla” opuses of “Assassin’s Creed”.
The video game industry is currently experiencing a growth crisis, in particular because, while waiting to be able to buy a new generation console (PS5 for example), players are buying fewer games for older generation consoles.