French videogame maker Ubisoft Entertainment tumbled in U.S. trading Wednesday - its American Depositary Receipts ( OTCPK:UBSFY ) fell 13.6% , while foreign shares ( OTCPK:UBSFF ) slid 9.7% on OTC markets - after a major financial update from the company where it slashed forecasts and increased writedowns as well as canceling more projects.
That news comes amid some growing struggles at the game publisher, including as recently as the just-finished holiday season. CEO Yves Guillemot admitted the company was surprised by the underperformance in recent weeks of its Mario + Rabbids: Sparks of Hope.
Meanwhile, after it had already announced last July that it was cutting four planned projects, it now says it will kill three more, and promising release Skull and Bones will be delayed to "early 2023-24," with a beta phase upcoming.
The company increased a writedown of capitalized research and development to €500M (about $537M), encompassing upcoming premium and free-to-play games along with the new cancellations. It will also cut costs by more than €200M over the next two years, with a focus on "targeted restructuring, divesting some non-core assets and usual natural attrition."
While recent performance left the company "disappointed," Guillemot says industry long-term prospects are promising, and "Ubisoft is well positioned to benefit from this momentum thanks to the strength of our teams, brands, production capacity, technology and balance sheet."
For further details see:
Why did Ubisoft stocks slide today? Cut guidance amid more struggles