Wall Street Slashes Star Wars Outlaws Outlook | Ubisoft Bankruptcy Coming? | Ubisoft Stock

how bad are things getting for Star Wars Outlaws well we've got an update for you today and if you read between the lines on what certain folks on Wall Street seem to be indicating you have to wonder if they're not thinking that bankruptcy might actually be on the table [Music] R online game developer Ubisoft slides amid muted reception for Star Wars Outlaws um shares and French video game maker fell on Tuesday for a second consecutive day again because people out there in the US are wondering well how did that happen Monday was Labor Day Labor Day don't happen in France the stock market was still open over there sluggish performance after two of its recent releases including the long awaited star a Wars Outlaws the shares of Ubisoft closed 5.1% lower on Monday we down by 2.4% by 1114 Greenwich meantime trading at their lowest levels in nearly 10 years adding to their over 30% drop since the start of the year the decline was driven by a muted reception of Outlaws released on Friday which follows lower than expected interest for the companies's free to playay game ex defiant uh midcap Partners analyst were looking at this and now you brought up and deian something that JP Morgan said now we also had one that I covered on Sunday uh that was reported by the financial times of the UK and that was a Barkley's Bank analyst um and Barkley's bank is a huge uh investment firm Investment Bank big Bank in the UK um Barkley's and this is what I found interesting Barkley's suggested unless it was a typo in that Financial Times article which matter of fact let me see if I still have it here let me pull that up uh Barkley's had indicated according to their uh analysis they were had originally uh projected I believe 8 million units sold they had slashed that forecast here it is right here they had slashed their forecast in Barkley to around uh 5 million units to be sold for outlaws now they were projecting that for the quarter it was two days later and it's this is the article I'm referring to if you hadn't seen this one yet and Demian this is where things really get scary um Ubisoft here it is right here um and I don't know if you caught this again we we pulled a video from it um I'm trying to find it here where is it here we go Nick Dempsey at Barkley's there it is the guidance translates into 5 million copies in the quarter analyst slash the number from 8 million in the quarter in the quarter okay and on top of that they said that while it's true the previous iteration of Valhalla sold 13 million copies a Repeat Performance may be unlikely Shadows set in feudal Japan has already caused a stir okay and in order for Ubisoft to actually hit its guidance for these two games given the severe underperformance of Outlaws Ubisoft is going to have to sell 13.5 million copies of Shadows which would be 500,000 more than Valhalla that's impossible and I'll tell you why yeah I know so Valhalla is actually Ubisoft second most like second best performing game of all time number one is Rainbow Six Siege Valhalla made so much money for Ubisoft and was such a success story that they ended up releasing multiple expansions that it was never meant to have in the first place that's why you had Don of rag Rock sieg of Paris and so on they had all these things come out for it Shadows is nowhere near going to get what valhala did and valhalla's smart by the way because they actually um kind of played both sides of the argument if you will because they basically promoted the game with the male version of aore so all the male players wanted to play it but then they say when you play the game that the female version of avore is actually the Canon version and they did the same exact thing with Odyssey as well they actually promoted that game with alexio Cassandra was the main character apparently so but this time they can't do that because there's you just play now way and yasuke there's nobody else and I think going forward they are never if they survive is I don't even know let's let's just assume they survive this if they do you are never going to see another dual protagonist Assassin's Creed game ever made again because the last time they did this was actually syndicate with h Jacob and Eevee fry and that was actually the worst performing Assassin's Creed game but that had less to do with the fact that it had dual protagonists and more to do with the fact that Unity was received so badly that people basically said no more to Assassin's Creed and that's why synd did so poorly and then they brought everybody back once they made Origins which was basically just Assassin's Creed Witcher but not as good and they tried to make Witcher three times and then they you know finally got Valhalla which did really well but this this is gonna be I I really don't see this doing well at all and they really have no to blame themselves no no way beating Valhalla no way and remember that Valhalla Valhalla came out when the PS5 and the Xbox series X came out which was the height of the pandemic right when everybody was at home doing nothing exactly so like I I bought Valhalla with my PS five I bought it I bought it with that Miles Morales and uh Demon Souls remake right and I 100% did Valhalla and odyssey and Origins because like I had nothing better to do at the time I wasn't doing YouTube I was just at home you know we're all at home and during covid whatever but now people are out and about the econom is not doing as well there's no way that shadows will do better than than Valhalla I'd be shocked I I agree I don't think there is either but it brings up the point from the guy from JP Morgan which is what I found to be this part to be very interesting and despite an overall this is back to the Reuters article uh that came out just a uh just here September 3rd yesterday uh despite an overall positive reception by critics which clearly don't matter critics had a positive reception for the acolyte we know how that turned out Star Wars Outlaws had a quote generally unfavorable user score of 4.9 out of 10 quote Star Wars Outlaws has struggled to meet our sales expectations Des despite positive critical reviews JP Morgan analyst Daniel kin said the game's development budget was at least 30% higher than Assassin's Creed Mirage got some information on that as well released last year while data from video game live streaming platform twitch suggested it was underperforming mirage by about 15% and we showed the other day and I still have it over here the numbers have not changed uh very much at all uh currently black myth Wukong on Twitch 61.5 th000 viewers Star Wars Outlaws still around 4,000 viewers I'm sorry 2.8 2.8 th000 viewers on Star Wars Outlaws 50,000 viewers on black myth I hadn't refreshed it pardon me but still like 20 times more people are watching roughly black myth Wukong on Twitch right now then Outlaws these two games came out at almost exactly the same time here's the kicker though um kin JP Morgan's chief analyst for the sector also lowered his sales expectations for outlaws by 2 million units to 5.5 million units in the year through March 2025 so here we go Barkley's analysts said that they were lowering projections down to 5 million units by the end of the quarter JP Morgan Bank has a far more dire outlook for this game saying that it might make 5 million units by March six months from now not at the end of the quarter at the end of September it might it might not make 5 million units by the time we get to March of 25 the end of the fiscal year for Ubisoft this is an absolute catastrophe because they're talking about this this game Star Wars Outlaws a 30% higher budget than that of Assassin's Creed Mirage now I will say this was a bit of a trick I had to really dig and dig and dig and dig and I could not really find much of anything on Mirage and and Dei and I don't know if you really know but I pulled this up from May of 2021 Assassin's Creed Valhalla which my understanding is that Mirage was a smaller scale game yeah so Mirage Mirage was was was meant to be DLC for Valhalla and then eventually it got too ambitious because it stars it stars a character from Baghdad that comes into valhalla's story his name is Bassam and Bassam is the main character Mirage takes place before Valhalla there's a whole thing if I'm not gonna explain it has to do with the whole ISU technology like the you know the future human stuff whatever anyway so Mirage was then made into its own game and apparently that game actually did really well it came out and it apparently had sale numbers close to they said Origins and odyssey at launch keep in mind though the Mirage was cheaper because again it was meant to be DLC first I think I think it came out at $50 Canadian or something like that instead of the usual 7080 um but even then I mean considering the fact that it sold like if if it sold just the same as Odyssey and Origins did in their opening like month or two yeah that means Mirage was a big success and I think a big reason for that also was because there was no identity politics I mean come on it's in b like they're not going to there's no way they're going to you know put some they them feminist stuff in a game about like Muslims and stuff there's no way so that was at least you know that was gonna happen so Assassin's Creed Valhalla uh you know you look at this um you you you look here vahalla they're talking about Odyssey uh reportedly around 500 million uh is what the total cost in for that was and again if you look at Odyssey and you look at um Valhalla and you look at Mirage being a smaller scale let's say it came in at 200 million right I if Outlaws was 30% more than that if Outlaws came in at 260 or or if Mirage was 250 half of this $500 million monster and it came in at 325 I mean we're talking about a massive hurdle to get over and when you compound that with the biggest marketing budget according to Ubisoft that they had ever made for any video game ever which is astonishing to me um the Bigg problem just the money they're leaving on the table like they're leaving a lot of money on the table with st with a Star Wars like you think of the name Star Wars you put that on a project you put that on something and you should just be able to print money at that point because Star Wars is that kind of franchise like you said they spent four billion dollar they didn't spend four billion dollar on that franchise for nothing it's it's that big and so you would think hey we put Star Wars on this we put you know a good story around it we put some money behind it we should just be able to just crank out print money right you know I mean we're gonna make our you know um we're gonna make our budget back and then some we're not even worried about that so yeah go ahead go all in on the marketing you know do whatever it is you need to do because we're going to make all our money back and the fact that they are struggling and they're probably not even going to get close to five million sales by the time we roll around to March of next year the game's been for six months that's insane uh but it goes right back to that previous article where you were saying well you know they listen I don't know if they're listening to I don't know where they're getting their data from are they listening to the critics that are loving this and say oh it's got this despite positive critic reviews when are they going to start listening to the fans when are they going to start listening to the customers and the people that are actually going to buy the product because guess what those critics they're not going to be buying those 5.5 million uh copies of Star Wars Outlaws okay it's going to be the hardcore the the the fans okay the people that are going to come out of their pocket they love the franchise or they love these types of games and this is why they're buying it but they're not listening to those people you know pay attention to what the uh the users or the um with what I'm thinking of the audience listen to the audience reviews forget the critic or the critics are the critics we know the critics are going to be you know whatever listen to the paying customer for once and they don't seem to understand that and I don't know how long we're going to be going through this when it comes to entertainment when it comes to you know all of this stuff we they have not listened to the hardcore fans for I don't know how long and it's just getting to the point where it's hilarious at this point like wow here's a Star Wars game and it's underperforming to this degree 55% lower than Jedi Survivor like you gotta be kidding me guys this is wild man and and it's like they just don't learn and it's wild too when you think about it because when Disney first bought Star Wars one of the first games they released under their new like ownership I guess you could say was Star Wars Battlefront and Battlefront was pretty Bare Bones people remember when that first one came out but it came out during the hype of those movies when they were first coming out too and I think the first Star Wars Battlefront people can probably correct me but I think it sold like 10 11 12 million in like its first fall opening release whatever it is like it made a lot of money and this it just goes to show you that the apathy of Star Wars has basically Tak Road no one cares yeah it's very very deep yeah is it makes it makes me worry that like if if and I think really what it comes down to is like people can say you know it's it's the ugly character which is a big reason but I think I think the major major reason here is simply because it's Ubisoft everybody knows that ubisoft's name is no longer tied to Quality it just isn't all of their all of their franchises are just homogeneous they all feel and look exactly the same you look at the division you look at Ghost Recon Wild lands look at Watchdogs look at Assassin's Creed even they all have this similar identity the similar concept to all of them like you climb around it's always third person there's some kind of cover based shooting or stealthing around and take out guys from behind that have terrible AI every single game is like that I remember I tried X defiant because my buddy like really wanted me to try it and I really didn't want to play I was like let's just try and seem like fine so I I try ex defiant it's like a poor man's Call of Duty with a bunch of Ubisoft like mascots in it and it's awful and I'm like this is and I'm not surprised at that game's feeling too because everything they make is just painfully generic everything so in February uh Eve gimo talks about how hey we're coming out of the funk right we're coming back from from the doldrums uh this is the beginning of our turnaround beginning of our recovery and to kind of set that up like we talked about Sunday uh this is what he is referring to if you look back here all right this is where in 2021 Ubisoft was $83 a share yeah so if we look here okay in 2023 January of 2023 they hit $19 so when we get to February over here of 2024 right about there February 12th okay $25 a share that was after that February 8th earnings call hey this is the beginning of our recovery so let me bring this down to year to date so February 7th it's at 19 they have their earnings call hey we're going to turn things around this is coming that's we got Outlaws we got Shadows boom Ubisoft jumps the following day of trading from 19 to about 2425 midday so Ian literally in in a in a day it jumps or within the next week it jumps about uh 20 % which is a huge onewe move uh for a stock uh you know the following day it it it jumped tremendously 1922 23 24 okay then some reality started setting in all right we get all the way out here to July that next earnings call that we set around July 19th right so here we go uh we're right here July 19th 18th 2250 so it's still floating up there they had that earnings call look at what's happened since then and then of course right here let's go here August 29th it's at $17 and then Outlaws came out and now we're at554 and what was it at the highest 8 80 something 83 back in 21 damn yeah that was yeah that makes sense it's right after Valhalla that's it right after Valhalla that's it because Valhalla did really really well that's kind of what they want you look at all their games too not only are a lot of Ubisoft games just like homogeneously the same in terms of how they play and stuff they're all open world for the most part or they're massively multiplayer whatever games and they all have cash shops every single last one of them even even the single player games like even Mirage which I said was like 50 it launch whatever it still had a cash shop you know even like Prince of pers of the Lost Crown which was like 40 at launch they still had microtransactions available they always do and I bet you I bet you so much that once Shadows comes out it's the same thing I actually don't even know if Outlaws has a cash shop but if it does I wouldn't be surprised because I haven't played it obviously so I don't want to give money for it it seems like a lot of people don't want to Pony up the money for that make sure you're subscribed to Valiant Renegade and join us every Sunday at 600 p.m Eastern for the live show