Ubisoft, the French gaming giant, is facing a tough time as its shares continue to slide, driven by the lukewarm reception of Star Wars: Outlaws. Released just last Friday, the game was one of Ubisoft’s major bets for 2024, but it didn’t quite hit the mark. Despite generally positive reviews from critics, players weren’t as impressed, leading to a “generally unfavorable” user rating of 4.9 out of 10 on Metacritic. This has been a significant blow to Ubisoft, whose stock has already lost over 30% of its value since the start of the year.
Why the Drop in Ubisoft’s Stock?
As of September 3rd, Ubisoft’s stock had dropped by 2.4%, reaching its lowest level since 2015. This decline is attributed to the disappointing performance of Star Wars: Outlaws and the underwhelming reception of another recent release, Xdefiant. The latter, a free-to-play shooter, initially generated buzz but quickly saw a steep drop in player interest and viewership on Twitch.
Analysts were particularly concerned because Star Wars: Outlaws had a significantly higher development budget—at least 30% more—than Assassin’s Creed Mirage, a title released by Ubisoft last year. Despite this, early sales figures and player engagement have not met expectations. J.P. Morgan analyst Daniel Kerven even lowered his sales forecast for Outlaws by 2 million units, predicting that it would sell only 5.5 million copies by the end of the fiscal year in March 2025.
The High Stakes of Star Wars: Outlaws
Star Wars: Outlaws was not just another game for Ubisoft; it was supposed to be one of the key titles that would help the company recover from four consecutive years of negative cash flow. After delays and cancellations of other projects, Ubisoft was banking on Outlaws and the upcoming Assassin’s Creed Shadows, set to release on November 15th, to bring a financial boost.
The game, developed with a massive budget and high hopes, was expected to tap into the dedicated Star Wars fanbase and offer a new, immersive experience in the franchise’s universe. However, despite the critical praise for its storyline and world-building, the game didn’t resonate as strongly with players. Performance issues, bugs, and a general feeling that it didn’t offer enough new or exciting content compared to previous Star Wars games contributed to its underperformance.
The Fallout: What’s Next for Ubisoft?
The underwhelming performance of Star Wars: Outlaws has put Ubisoft in a difficult position. The company’s reliance on this game to turn around its fortunes has backfired, putting additional pressure on the upcoming Assassin’s Creed Shadows. If Shadows fails to perform, Ubisoft could face even more significant financial challenges.
The gaming industry is notoriously competitive, and companies like Ubisoft need consistent hits to stay afloat. The mixed reception of Star Wars: Outlaws highlights the risks involved in developing big-budget games, especially in a franchise as beloved and scrutinized as Star Wars. Ubisoft’s strategy of investing heavily in blockbuster titles comes with high rewards but also high risks, and when those risks don’t pay off, the consequences are severe.
Can Ubisoft Recover?
It’s not all doom and gloom for Ubisoft, but the company will need to make some strategic decisions moving forward. One possibility is to focus on improving Star Wars: Outlaws through updates and expansions, addressing player concerns and potentially turning the game’s fortunes around. Post-launch content, bug fixes, and community engagement could help boost the game’s standing and sales over time.
Additionally, the success of Assassin’s Creed Shadows will be crucial. If Shadows can deliver on its promises and captivate players, it could offset some of the losses from Outlaws and restore investor confidence in Ubisoft’s ability to deliver hit games.
Finally, Ubisoft may need to diversify its portfolio and explore new revenue streams, such as mobile gaming, which has been a growing market. The company has already made some moves in this direction, but the success of these ventures will be vital for its long-term stability.
Conclusion: A Cautionary Tale for the Gaming Industry
The decline in Ubisoft’s shares following the release of Star Wars: Outlaws serves as a reminder of the high stakes in the gaming industry. Even with a massive budget, a beloved franchise, and positive critical reviews, success is never guaranteed. For Ubisoft, the focus now shifts to damage control and planning its next moves carefully.
The gaming community will be watching closely to see how Ubisoft responds to this setback. Will they manage to turn things around with Assassin’s Creed Shadows? Or will they need to rethink their approach to game development and marketing? Only time will tell.
In the meantime, the saga of Star Wars: Outlaws serves as a lesson in the volatile nature of the gaming industry—where even the biggest titles can stumble, and companies must always be ready to adapt and innovate.
Source: Reuters
