Ubisoft Stock Plummets: Game Creator Faces Trouble
- Video game giant Ubisoft announced Wednesday it will undergo critically important organizational changes and cost-cutting measures following years of weaker financial performance.
- Ubisoft will also close development studios in Halifax, Canada, and Stockholm, Sweden, with the restructuring impacting other locations as well.
- The company's stock value plummeted more than one-third on Thursday in response to the news, reaching its lowest point in 14 years, Reuters reports.
Ubisoft Announces Major Restructuring, Cancels Several Games
Video game giant Ubisoft announced Wednesday it will undergo critically important organizational changes and cost-cutting measures following years of weaker financial performance. The company is canceling the development of six new game titles, including a long-awaited remake of “Prince of Persia,” and delaying seven other unnamed projects.
Ubisoft will also close development studios in Halifax, Canada, and Stockholm, Sweden, with the restructuring impacting other locations as well.
The company’s stock value plummeted more than one-third on Thursday in response to the news, reaching its lowest point in 14 years, Reuters reports.
Ubisoft has faced challenges in recent years due to game delays and lower-than-expected sales. Last November, the company postponed the release of its interim results, triggering a week-long suspension of trading in its shares and bonds.
Corentin Marty, an analyst at TP Icap Midcap, described the planned reorganization as a “major shock” in a comment to investors.
“The outlook for a return to positive cash flow seems distant,” Marty said. He noted that the company will face a challenge in repaying €675 million (approximately $735 million USD) in bonds next year.
Ubisoft’s stock value had already fallen by roughly half last year. The company’s market capitalization has now dropped significantly below €1 billion (approximately $1.08 billion USD). At its peak in 2018,Ubisoft’s market value reached nearly €11 billion (approximately $11.9 billion USD).