According to Bloomberg Ubisoft has cut their forecasts for net bookings by 1.45 billion euro and went on to slash their projected operating income (profits made) by between 460 to 430 million euro to be between 20 and 50 million euro. After the announcement the company’s stock price dropped by as much as 29% before stabilizing going into the weekend.
Ubisoft’s CEO Yves Guillemot went on to clarify there being two reasons for the performance decline. The first was the utter failure of Ghost Recon Breakpoint. A title that struggled to find an identity as it threw amongst microtransactions a bevy of pointless half implemented features at players. None of which resonated with players or each other leading most to report the experience to be not that engaging.
The second source of the decline was the under-performance of The Division 2. It can be argued the title suffered as a result of its politicized story, but while that did wound the title the bevy of bad patches and a lack of focus on what players wanted out of the title drove the steak into its heart.
Further in the Bloomberg article it becomes clear that investors have absolute no idea how the video game industry functions. Their go-to excuse for Ubisoft is to highlight how dependent a video game company is on the success of their video games. That the blame lies with a declining appetite for games is ridiculous, given that at the same time smaller publishers like Focus Home Interactive posted record, as reported by Gamasutra.
“But by ensuring that the future releases are given a closer focus on quality — and then timed for the following fiscal year, when the additional catalyst of the next generation of consoles will be with us, then this misstep now could turn into a well-timed opportunity ahead.”
Next generation consoles are not going to see a wide adoption rate within the first year to justify a solo market focus. Especially with rumors the PS5 and Xbox Scarlet will be priced at $500, a price point that tanked any possible success for the launch of the Xbox One and dethroned the king of the American market. A market that the head of Sony is already warning will see a decline is not going to be a company savior.
If these analysts understood anything they would be talking about restoring consumer choice and the negative backlash against the GaaS monetization model that can be attributed to this decline. Ubisoft, in a conference call, certainly demonstrated they had not learned this lesson.
First learning: we need to make sure that for live multiplayer games, there is sufficient time between each iteration releases to build strong anticipation and momentum.
“Second learning: we need to make sure that all our upcoming productions benefit from enough development time. This has been our strategy for many years and it has proven very effective. This situation is telling us we can’t make exceptions. This is even more true when we bring new innovations that require complex optimisations
“Third learning: while many of our titles are strongly differentiated, we need to ensure this is the case for all of them.
TLDR
1) Space out their live service titles
2) Have enough development time
3) Titles different from one another
Sadly these are not good lessons nor will they address the critical issues facing Ubisoft. Not addressed was the critical lack of substance most of their titles have and the annoying push toward political agendas that cut off hundreds of thousands of sales per title and continuously damages the brand going forward.
Even if not actively, many will subconsciously decide that Ubisoft’s titles are not for them.
Certainly not competing with yourself is a good idea, but hardly matters how much you space out your titles if the new title isn’t appealing to consumers. Nor will even a hundred years development time make a bad idea good.
Only the final lesson might hold some worth if they use it to understand Sam Fisher should be a stealth operative, not a Ghost with fancier gear, or a Rainbow Six operative with more stealth. If the lesson is Ghost Recon should be Ghost Recon and Rainbow Six should be Rainbow six leaving Splinter Cell to be Splinter Cell that will be a step in the right direction.
Yet the likely outcome will be titles different enough while still casting the widest net to rake in the live service dollars. Further proof the company has learned nothing is their plan to put the titles out on next generation platforms. Targeting unproven markets that haven’t even fully announced themselves is a recipe for disaster.
Yet if you were looking forward to Watch Dogs: Legion, Gods and Monsters, or Rainbow Six Quarantine you’ll have to wait between July and December of next year as the company is optimizing them for next generation launch. That does raise the question of whether we’ll see a summer or spring launch of either the PS5 or next Xbox given the insistence they are being prepared for a next generation of consoles.
To appease investors Guillemot and Duguet (chief financial officer) announced Ubisoft will be releasing two new AAA titles next year from “big franchises.” In the same time period, smashed together are going to be two AAA releases, Legion, Gods and Monsters, Quarantine, and Skull and Bones. All in the same year when the company just previously said their titles failed by being too close to other liver service titles in a vastly less crowded year.
Alas it does not appear Ubisoft has garnered any meaningful wisdom from their 1.61 Billion dollar loss and their plunging stock price. If you their fans were hoping their feedback was taken into consideration, that the company realized their monetization of pointless experiences with the sole purpose of extracting as much capital from their customers as humanly isn’t the way forward, they are in for disappointment.
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