Shares of Ubisoft (UBSFF) fell as much as 20% after the French video game maker lowered its revenue guidance and cancelled or pushed back the release of several titles.
Ubisoft’s stock is now at its lowest level in more than seven years after the company lowered its net bookings guidance to 725 million euros (Cdn$1.05 billion), down from an earlier target of 830 million euros.
The company forecast that its full-year net bookings will likely fall 10% after an earlier projection for a 10% increase.
The company, which produces hit video game titles such as Assassin’s Creed and Far Cry, cited a challenging economic environment that has hurt demand for video games as the reason for the lowered outlook.
The global video game industry is forecast to have contracted 4.4% year-over-year to $182 billion U.S. in 2022, according to market research firm Ampere Analysis.
Some analysts view Ubisoft as a potential takeover target after its stock sank more than 50% in the last year, reducing its market capitalization by three billion euros.
In September, Tencent upped its stake in Ubisoft in a deal that made the Chinese company Ubisoft’s largest shareholder with an 11% stake.
Ubisoft said it now plans to reduce costs by 200 million euros through targeted restructuring, divestment of non-core assets, and employee attrition.
