Yesterday's quarterly review did not win over many investors. Ubisoft's share prices fell 22 percent, which Bloomberg calls the company's biggest drop "since at least 1996." Apparently, people did not respond positively to the company losing millions of dollars. In fact, a number of analysts have downgraded the stock, such as Deutsche Bank's move from "buy" to "hold."
The tumultuous fall of Ubisoft's stock price may provide some opportunity for other investors, though. Michael Pachter offered a more favorable analysis of the company's upcoming portfolio, telling Gamasutra that "Ubisoft has the potential to deliver much higher revenue and EPS going forward as it focuses on AAA-quality franchise games with a history of success (emphasis ours)." For better and for worse, that means Ubisoft needs to focus more on games like Assassin's Creed, and less on games like Beyond Good & Evil if it plans to woo investors back.
Reader Comments (29)
Posted: Nov 16th 2010 10:31PM Marshillboy said
Lols.
Posted: Nov 16th 2010 10:44PM Hivetyrant said
"Ubisoft has the potential...."
Well this is a business, why aren't you living up to that potential? I wouldn't invest in a company that admits it's not doing all it can either. (along with other reasons like releasing games like ass creed over and over)
Well this is a business, why aren't you living up to that potential? I wouldn't invest in a company that admits it's not doing all it can either. (along with other reasons like releasing games like ass creed over and over)
Posted: Nov 16th 2010 10:46PM Hivetyrant said
Ignore that, I thought it was a Ubisoft spokesperson, it was an analyst.
Derp Hivetyrant
Reply
Derp Hivetyrant
Posted: Nov 16th 2010 10:47PM ArchiGamer said
I can I have to agree with Pachter on this one, though we may all want another BG&E game I doubt it will be a critical success as opposed to another Ac game. Though, hopefully they will use the success of AC to fund other new IPs or sequels, such as BG&E. Hopefully.
Posted: Nov 16th 2010 11:27PM TheyDidItFirst said
@ArchiGamer
Do you mean commercial success? If anything, I can see it being even more of a critical success.
Reply
Do you mean commercial success? If anything, I can see it being even more of a critical success.
Posted: Nov 16th 2010 10:52PM TraceurRyuk Prepping for LBP2 said
@UseSplashAttack
What a dick.
What a dick.
Posted: Nov 16th 2010 11:08PM Masker13 said
@UseSplashAttack
You want all those people to lose their jobs?
Prick indeed.
You want all those people to lose their jobs?
Prick indeed.
Posted: Nov 16th 2010 11:08PM eliteghost said
@Guts
Please don't say most map packs. Call of Duty is one of a handful of games that charges that much (
Please don't say most map packs. Call of Duty is one of a handful of games that charges that much (
Posted: Nov 16th 2010 11:11PM Masker13 said
@eliteghost
MW2 is, we've yet to see the direction Treyarch takes with Black Ops.
MW2 is, we've yet to see the direction Treyarch takes with Black Ops.
Posted: Nov 16th 2010 11:11PM eliteghost said
Wow Joystiq, not a double reply this time, just a cut off reply. We're improving I suppose. The rest of my comment (apologies for the "double post")
@Guts
Please don't say most map packs. Call of Duty is one of a handful of games that charges that much (
@Guts
Please don't say most map packs. Call of Duty is one of a handful of games that charges that much (
Posted: Nov 16th 2010 11:15PM eliteghost said
@eliteghost
These reply fails are getting real old. From double posts to this.
Reply
These reply fails are getting real old. From double posts to this.
Posted: Nov 16th 2010 11:23PM jasu78 said
Maybe the should just stop putting 15 minute long unskippable credit sequences at the end of their games. Is there really a need to thank their neighbor's brother's cousin's mailman's uncle's dog's dog food company for each of the 7 localization teams?
Posted: Nov 16th 2010 11:28PM Marshillboy said
@UseSplashAttack
What he meant to say is maybe they'll start making good games
What he meant to say is maybe they'll start making good games
Posted: Nov 16th 2010 11:32PM Drakkenfyre said
Let's see. On the pc side they decided everyone should be connected 24/7 online to play single player. So therefore the games that require this have become their biggest pirated games.
I am glad to see it come back and bite them in the ass.
I am glad to see it come back and bite them in the ass.
Posted: Nov 17th 2010 12:36AM Landozelig said
@Drakkenfyre
^^^ what he said. Ubi's ridiculous DRM drove me away. I swore off buying any game by Ubi either for PC or xbox and stand by it. Appears they lost quite a few customers because of it.
Reply
^^^ what he said. Ubi's ridiculous DRM drove me away. I swore off buying any game by Ubi either for PC or xbox and stand by it. Appears they lost quite a few customers because of it.
Posted: Nov 17th 2010 5:21AM Dextro said
@Drakkenfyre
Amen to that. I was actually pleased to see this bit of news, it shows that even if a company makes kick ass games (and they have been doing so, that's what makes me so annoyed) they will still be punished by treating their customers like criminals with one of the most invasive pieces of DRM seen yet.
Now the sad part is that some manager at the company is going to get to the conclusion that this happened only because their DRM wasn't restrictive enough yet instead of getting the message and that makes the panda sad.
Reply
Amen to that. I was actually pleased to see this bit of news, it shows that even if a company makes kick ass games (and they have been doing so, that's what makes me so annoyed) they will still be punished by treating their customers like criminals with one of the most invasive pieces of DRM seen yet.
Now the sad part is that some manager at the company is going to get to the conclusion that this happened only because their DRM wasn't restrictive enough yet instead of getting the message and that makes the panda sad.
Posted: Nov 16th 2010 11:42PM Esposch said
@Marshillboy
By stopping production of games...
No, it's more likely that he was implying that they will turn into a fast food chain.
By stopping production of games...
No, it's more likely that he was implying that they will turn into a fast food chain.
Posted: Nov 16th 2010 11:44PM Esposch said
@Marshillboy
By stopping production of games...
No, it's more likely that he was implying that they will turn into a fast food chain.
By stopping production of games...
No, it's more likely that he was implying that they will turn into a fast food chain.
Posted: Nov 16th 2010 11:52PM wcarnation said
Maybe if they stopped making laser tag games and stuff like that.
People always point fingers at the brilliant games that sold poorly, I think its better to keep a grasp on all your brilliant ideas if they sold good or bad and recognized the bum ones that need to get tossed. Then figure out what to do with your good ones.
People always point fingers at the brilliant games that sold poorly, I think its better to keep a grasp on all your brilliant ideas if they sold good or bad and recognized the bum ones that need to get tossed. Then figure out what to do with your good ones.
Posted: Nov 17th 2010 12:00AM InDurdenWeTrust said
Wow at all the Ubisoft hate. I for one love most of their games.
Posted: Nov 17th 2010 12:15AM Cameage said
Not focusing on finally finishing that stupid BG&E sequel is definitely for worse...but I'd rather wait even longer than have it get cancelled because Ubisoft goes into impact mode.
Posted: Nov 17th 2010 12:16AM GMUHistorian said
@Guts
You destroyed your own point about DLC before you even made it. Even by your own admission nobody is forcing you to purchase map packs. That's the end of the story right there. If you don't want to purchase $15 map packs then don't. You can still play multiplayer modes that don't require those map packs, or other games multiplayer modes. Consumers need to stop "blaming" developers and/or publishers for producing content and start exhibiting some self control over their own wallets. People whined and complained about MW2's $15 map packs and then they went and bought them in record numbers. Just what kind of a message does that send to Activision? It says "I'm okay with paying higher prices for DLC."
I also don't agree with the "nickel and diming" of the gamer section of your post. Even if one assumes that the "true" cost of a game is $85-90 because the gamer will purchase at least some DLC, taking inflation in to account that price is not higher than in previous generations. Even if you don't take inflation in to account the price of some games for NES at many US retail stores was $80. The price of Virtual Racing for the Genesis was also $80 at most places in the US. Formula One Racing for the Genesis even went for as high as $150 in the US.
Gamers don't see prices like that today. People don't want to hear it because the price did go up from the XBox/PS2 generation, but games are cheaper now than they used to be.
I definitely agree that we're going to hit a point where there will be precious few original IPs released every year because developers and publishers just can't take the chance on a game failing. For many gamers, especially now, regardless of whether games are cheaper than they used to be $60 is still a lot of money and people are unwilling to risk that and find that the $60 game stunk. I can remember the feeling of being absolutely ripped off after I plunked down $60 for Mercenaries 2, which wasn't even an original IP. Other than COD games and a couple sports games that's the last time I put down $60 without reading reviews first. My money's too valuable.
I'm not surprised this sell off of Ubisoft stock happened. This is why I get sick of gamers whining about Activision potentially closing an unprofitable studio. Yes, it's really sad that people lose their jobs but the alternative is for the entire publisher's stock to go down and even more people lose their jobs and even more games are canceled or pushed back because of those job losses.
My gripe with the publishers is that their marketing budgets seem to go up only for the AAA titles and that's backwards. If they want a title like BG&E, or in Activision's case Blur, to do better they need to ramp up the marketing for those games. Games like Assassins Creed: Brotherhood, Splinter Cell: Conviction or Black Ops will basically sell themselves because the franchises have loyal fan bases already, it's the new IP's that need the marketing hype.
You destroyed your own point about DLC before you even made it. Even by your own admission nobody is forcing you to purchase map packs. That's the end of the story right there. If you don't want to purchase $15 map packs then don't. You can still play multiplayer modes that don't require those map packs, or other games multiplayer modes. Consumers need to stop "blaming" developers and/or publishers for producing content and start exhibiting some self control over their own wallets. People whined and complained about MW2's $15 map packs and then they went and bought them in record numbers. Just what kind of a message does that send to Activision? It says "I'm okay with paying higher prices for DLC."
I also don't agree with the "nickel and diming" of the gamer section of your post. Even if one assumes that the "true" cost of a game is $85-90 because the gamer will purchase at least some DLC, taking inflation in to account that price is not higher than in previous generations. Even if you don't take inflation in to account the price of some games for NES at many US retail stores was $80. The price of Virtual Racing for the Genesis was also $80 at most places in the US. Formula One Racing for the Genesis even went for as high as $150 in the US.
Gamers don't see prices like that today. People don't want to hear it because the price did go up from the XBox/PS2 generation, but games are cheaper now than they used to be.
I definitely agree that we're going to hit a point where there will be precious few original IPs released every year because developers and publishers just can't take the chance on a game failing. For many gamers, especially now, regardless of whether games are cheaper than they used to be $60 is still a lot of money and people are unwilling to risk that and find that the $60 game stunk. I can remember the feeling of being absolutely ripped off after I plunked down $60 for Mercenaries 2, which wasn't even an original IP. Other than COD games and a couple sports games that's the last time I put down $60 without reading reviews first. My money's too valuable.
I'm not surprised this sell off of Ubisoft stock happened. This is why I get sick of gamers whining about Activision potentially closing an unprofitable studio. Yes, it's really sad that people lose their jobs but the alternative is for the entire publisher's stock to go down and even more people lose their jobs and even more games are canceled or pushed back because of those job losses.
My gripe with the publishers is that their marketing budgets seem to go up only for the AAA titles and that's backwards. If they want a title like BG&E, or in Activision's case Blur, to do better they need to ramp up the marketing for those games. Games like Assassins Creed: Brotherhood, Splinter Cell: Conviction or Black Ops will basically sell themselves because the franchises have loyal fan bases already, it's the new IP's that need the marketing hype.
Posted: Nov 17th 2010 1:16AM BananaBoat said
My first response after seeing the Ubisoft press conference at E3 2010 was that anyone holding their stock should dump it immediately. It looks like my fears about the health of the company were warranted. How long before EA or Activision gobbles them up?
(I still can't believe they brought laser tag to a press conference in 2010)
(I still can't believe they brought laser tag to a press conference in 2010)
Posted: Nov 17th 2010 2:03AM Starcade said
I think a lot of stocks dropped in the last week and half... the market is re-acting to global problems at the moment, whether or not companies are doing well.
And the first half of 2010, I'm not sure many companies did well. It's only in the last few months that everything has started to improve. We're supposedly leaving a recession, but confidence lags. And I think games, even though they're considered recession-proof, really aren't. People are more choosey when games are $60 or if there's too many options. The triple AAA titles are more recession proof, but Hawx 2 isn't what I'd consider triple AAA, in fact I'm surprised there was a sequel to the original game, which I don't remember setting the world on fire.
Ubisoft should come out just fine. I think they'll pick up their business, when everyone else does and as the economy improves. This quarter should be a better indicator of how the company is doing.
And the first half of 2010, I'm not sure many companies did well. It's only in the last few months that everything has started to improve. We're supposedly leaving a recession, but confidence lags. And I think games, even though they're considered recession-proof, really aren't. People are more choosey when games are $60 or if there's too many options. The triple AAA titles are more recession proof, but Hawx 2 isn't what I'd consider triple AAA, in fact I'm surprised there was a sequel to the original game, which I don't remember setting the world on fire.
Ubisoft should come out just fine. I think they'll pick up their business, when everyone else does and as the economy improves. This quarter should be a better indicator of how the company is doing.
Posted: Nov 17th 2010 2:16AM Vaancor said
I know this will kill any chance of BG&E2 and while I enjoyed me some SC:C and love Scott Pillgram, these freaking deserve it for even thinking of the DRM that they use on there PC games. This is what should happen when you treat your customers like dirt.
Unfortunatly though, I doubt Ubi will even notice that. They'll instead look at it to mean take less risks, such as Scott Pillgram, a new BG&E, or taking beaten francises in a new way, and start milking there big sellers to death. Also piracy.
Unfortunatly though, I doubt Ubi will even notice that. They'll instead look at it to mean take less risks, such as Scott Pillgram, a new BG&E, or taking beaten francises in a new way, and start milking there big sellers to death. Also piracy.
Posted: Nov 17th 2010 2:32AM omega286 said
SEE WHAT DRM GETS YOU UBISOFT?!?!?!
Posted: Nov 18th 2010 11:29AM Teletheus said
Maybe they'll just stop putting their games out on PC until they've been out on console for a while.
http://www.tweakguides.com/Piracy_6.html
That's the relevant section, although the whole thing is worth a read.
http://www.tweakguides.com/Piracy_6.html
That's the relevant section, although the whole thing is worth a read.
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