Investing.com -- Shares in Ubisoft Entertainment (EPA:UBIP) slumped by more than 16% in mid-morning European trading on Thursday after the French video game maker slashed its financial guidance.
In a statement released late Wednesday, the firm announced that it now expects to report net bookings of around €1.95 billion in its 2024-2025 fiscal year, down from the prior period. Second quarter net bookings, meanwhile, are seen at €350 million - €370 million, falling from a previous estimate of €500 million.
Ubisoft said the drawdown in its targets mainly reflected the group's decision to delay the launch of the much-anticipated latest installment of its popular "Assassin's Creed" franchise and a "softer than expected" launch of its "Star Wars Outlaws" offering.
The family-owned company has been banking on the games to help stem a recent run of underperformance that has seen it post four years of negative cash flows.
Ubisoft, however, has now postponed the release of "Assassin's Creed Shadows" from its originally planned date of Nov. 12 to Feb. 14, while "Star Wars Outlaws" has received a tepid reaction from gamers.
"Our second quarter performance fell short of our expectations, prompting us to address this swiftly and firmly," said chief executive Yves Guillemot. "In the light of recent challenges, we acknowledge the need for greater efficiency while delighting players."
He added that an internal review will be initiated to "further improv[e] 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.
Analysts at BMO Capital Markets said the update from Ubisoft "provides visibility" into the company's plans and helps to "de-risk" the stock's long-term story. They reiterated their rating of "Outperform" for the firm, but cut their price target to €20 from €22.
(€1 = $1.1145)