UBIsoft in potential financial trouble

[Dominik D]

… so it’s not even going to match an entry from 5 years ago? That sounds pretty horrible, considering it likely cost more to make.

What are you even trying to say - if it can't beat the second most profitable game Ubi has ever created then it's a flop? Get real. xD

Games in this franchise go up and down over time in terms of sales. First two sold around 7-8 mil, next few 10-12, then some sold 7-8 mil again with, I think, Syndicate hitting the lowest at 6 mil or so, with Origins and Odyssey getting to 10 mil. It's not clear how many Valhalla sold but microtransactions helped with its profitability. Shadows can push more units than Valhalla and generate less revenue and/or profit (or vice versa). Game development is not "line always goes up" activity.

 

[Shifty Geezer]

a single release doing well could absolutely reverse a company’s fortunes. If there’s no feasible way Shadows pulls them out of looming bankruptcy then what is the point of developing it?

'Well' is a relative term. You need to convince the shareholders you have a future. Making enough money might do that, but making one good game over a history of flops won't, what I suggest Shadows is, might well not. As to why do it? Even if bankruptcy is looming, any high increases value and sell price and payouts for execs. You don't just throw in the towel and admit defeat, especially if you know you have several hundred million of revenue upon release of your next game and can present that to your shareholders etc.

 

[pcchen]

What are you even trying to say - if it can't beat the second most profitable game Ubi has ever created then it's a flop? Get real. xD

If a project costs for example 10x more than a previous project, it can sell much better than the previous project but is still a flop.
I think the problem with Ubisoft is that they were spending much more money on recent games (such as Skull and Bones) probably due to overly optimistic expectation from Covid days. This is probably not unique to Ubisoft but other larger publishers (such as Microsoft and Sony) have deeper pockets to stomach some failures. Ubisoft on the other hand does not have this luxury.

 

[Dominik D]

If a project costs for example 10x more than a previous project, it can sell much better than the previous project but is still a flop.

I know, I wrote that "Shadows can push more units than Valhalla and generate less revenue and/or profit (or vice versa)". I think that the general issue here is that there's no single metric of success and in most possible futures Cappuccino can claim that Shadows was a flop. All it takes is for game to not succeed in every conceivable metric (i.e. fail in at least one). "It's a flop" is unfalsifiable statement, that's what makes it so enticing if you have beef with the game to begin with.

I think the problem with Ubisoft is that they were spending much more money on recent games (such as Skull and Bones) probably due to overly optimistic expectation from Covid days.

I think I mentioned it somewhere in this thread but Ubi was spinning its wheels for a long time without moving anything forward. Someone - reasonably - observed that development costs are on a path to infinity and this isn't sustainable. Executive decision was made to try and shift to smaller projects but there was no plan on how to do that. If you're used to N layers of management in 1000-person project but now you take on a 100-person one yet change nothing in terms of structure and keep those N layers of decision making, you're bound to fail. But that's precisely what happened. So it's likely that expectations are for Shadows to save the company from its internal turmoil, which I think is almost impossible. Even if Shadows is as profitable as Valhalla this may not be enough. But to me this is not a failure of a game, it's a failure of management.

 

[Cappuccino]

What are you even trying to say - if it can't beat the second most profitable game Ubi has ever created then it's a flop? Get real. xD

I’m saying if it’s losing to an iteration from 5 years ago it’s a flop, yes. You generally expect sales to go up, not down.

'Well' is a relative term. You need to convince the shareholders you have a future.

And a blockbuster success does just this. This was probably the most anticipated AC game ever, people have been waiting for this entry since Revelations.

 

[trinibwoy]

I’m saying if it’s losing to an iteration from 5 years ago it’s a flop, yes. You generally expect sales to go up, not down.

That previous iteration launched during covid lockdown.

 

[Dominik D]

I’m saying if it’s losing to an iteration from 5 years ago it’s a flop, yes. You generally expect sales to go up, not down.

Yes, sales always go up. That's how business works. By your metric half of the AC-s were flops. Somehow none of them buried the company so probably weren't flops for anyone but you. But that's ok.

You've heard it here first, folks. Twilight Princess and Skyward Sword were flops because they sold fewer copies than Ocarina.

 

[Shifty Geezer]

And a blockbuster success does just this.

Big disagree, although 'blockbuster' isn't qualified. I'd say a real blockbuster of the order of GTA might, but one quality AAA title that performs par for its investment won't turn around the fortunes of a failing publisher.

This was probably the most anticipated AC game ever, people have been waiting for this entry since Revelations.

And it looks to be selling among the best of them. Why would one think one single quality AC game could salvage the entirety of Ubisoft? Why would anyone pin their hopes on that one game without any other noteworthy changes such as a change in leadership that has caused it to slide for so long?

 

[Cappuccino]

That previous iteration launched during covid lockdown.

Yeah and that’s a good point and a mitigating circumstance. That said, probably outweighed by the fact a good chunk more people play games now than did in 2020. Worlds always growing.

Yes, sales always go up. That's how business works. By your metric half of the AC-s were flops. Somehow none of them buried the company so probably weren't flops for anyone but you. But that's ok.

You've heard it here first, folks. Twilight Princess and Skyward Sword were flops because they sold fewer copies than Ocarina.

If sales don’t always go up, we call that a ‘decline’.

You keep naming these examples like they’re some sort of gotcha, Twilight Princess and Skyward Sword were both unpopular games on release. Twilight Princess less so, but there’s a reason it sold less (and I’m unsure that’s true when you account for its re-release on Wii). I forgot Skyward Sword even existed lol.

 

[Cappuccino]

Big disagree, although 'blockbuster' isn't qualified. I'd say a real blockbuster of the order of GTA might, but one quality AAA title that performs par for its investment won't turn around the fortunes of a failing publisher.

And it looks to be selling among the best of them. Why would one think one single quality AC game could salvage the entirety of Ubisoft? Why would anyone pin their hopes on that one game without any other noteworthy changes such as a change in leadership that has caused it to slide for so long?

No, one game won’t, but it can move it in the right direction and would regain some lost confidence.

 

[Shifty Geezer]

No, one game won’t, but it can move it in the right direction and would regain some lost confidence.

Which Shadows has likely done landing Ubi a better price for the whatever they are selling off.

So, were you or anyone else expecting one single AC game to save Ubi? If so, why? How much were you expecting AC:Shadows to sell (revenue) and how far short has it come for you that you consider it a failure?

 

[Cappuccino]

Which Shadows has likely done landing Ubi a better price for the whatever they are selling off.

In the past month Ubisoft is down 30% so you tell me if it’s fetched them a better price on the market for a sale?

 

[Albuquerque]

In the past month Ubisoft is down 30% so you tell me if it’s fetched them a better price on the market for a sale?

And again, there are no hard sales numbers for AC, so how do you keep linking these two? Why do you keep bringing this up, when you have literally no factual data at all to support such a claim?

You realize stocks go up and down unrelated to anything to do with their actual sales and profitability, right? TSLA anyone? And AMZN for that matter.

 

[trinibwoy]

Yeah it’s really a stretch to look at all the madness happening in the world right now and attempt to correlate stock moves to a single game that just launched.

 

[Cappuccino]

And again, there are no hard sales numbers for AC, so how do you keep linking these two?

Like I’ve said previously, WS has ways of figuring out data that isn’t publicly compiled. It’s all priced in.

You realize stocks go up and down unrelated to anything to do with their actual sales and profitability, right? TSLA anyone? And AMZN for that matter.

of course. Do you think the decline of Ubisoft has anything to do with its recent flopped releases?

Yeah it’s really a stretch to look at all the madness happening in the world right now and attempt to correlate stock moves to a single game that just launched.

It’s pretty easy to draw conclusions about the movement of a video game publishers stock and how it’s related to the video games they sell lol.

 

[Albuquerque]

Like I’ve said previously, WS has ways of figuring out data that isn’t publicly compiled. It’s all priced in.

of course. Do you think the decline of Ubisoft has anything to do with its recent flopped releases?


It’s pretty easy to draw conclusions about the movement of a video game publishers stock and how it’s related to the video games they sell lol.

Given the actual data we are able to find (feel free to find more if you feel it supports your claims) the current AC title is selling quite well, at least better than two of the prior three titles in the series. This further reinforces the point I made in my prior post: even IF you could link AC sales to stock price, what little available data we have points to sales doing quite well. This means the stock price movement is purely on feelings and not on data.

Every time someone asks for sales data, it's "well it can be figured out" and "well they haven't announced it yet so how can you say...?" yet you then counter by suggesting their decrease in stock price is directly linked to bad sales. If there's no actual data for sales as you imply, then you cannot therefore link stock price to sales. Your position is not logically consistent.

I think Shifty said it best:

So, were you or anyone else expecting one single AC game to save Ubi? If so, why? How much were you expecting AC:Shadows to sell (revenue) and how far short has it come for you that you consider it a failure?

 

[Dominik D]

You keep naming these examples like they’re some sort of gotcha, Twilight Princess and Skyward Sword were both unpopular games on release. Twilight Princess less so, but there’s a reason it sold less (and I’m unsure that’s true when you account for its re-release on Wii). I forgot Skyward Sword even existed lol.

You're shifting the goalposts. It was your metric for a flop, now it's just a metric for lack of popularity. So selling less than previous installment makes you a flop or not?

 

[Shifty Geezer]

In the past month Ubisoft is down 30% so you tell me if it’s fetched them a better price on the market for a sale?

Your argument is all over the place. Maybe Shadows has failed to achieve that. Is your definition of a successful game "one that increases share price"? How do you even know that the share price is tied entirely to the performance of AC:Shadows and not anything else, as discussed when that was last raised? So far you keep pointing out different measures as one-liners. It'd be best if you actually presenting your entire viewpoint. What is your measure of success - units sold relative to previous iterations? Relative to world's best selling games? Revenue? Relative to what? Affect on share price? And then why have you picked that measure?

 

[Johnny Awesome]

Didn't Spider-Man 2 cost 3x the budget of the first game and sell about half as many? Is SM2 considered a failure?

It should be.

 

[Johnny Awesome]

Big disagree, although 'blockbuster' isn't qualified. I'd say a real blockbuster of the order of GTA might, but one quality AAA title that performs par for its investment won't turn around the fortunes of a failing publisher.

And it looks to be selling among the best of them. Why would one think one single quality AC game could salvage the entirety of Ubisoft? Why would anyone pin their hopes on that one game without any other noteworthy changes such as a change in leadership that has caused it to slide for so long?

I said "change Ubi's fortunes". I didn't say "salvage the entirety of Ubisoft". Let's not get crazy here.

To clarify, had AC:S been good enough then it might have been a signal to investors that they were righting the ship and on the right track and didn't need to panic and sell to Tencent. I'm fully aware that they would have to continue to make a series of good decisions to totally avoid that fate.