With shares at 10-year lows, Assassin’s Creed maker Ubisoft faces questions over its future
Ubisoft postponed the release of the next title in its popular “Assassin’s Creed” game franchise — called “Assassin’s Creed Shadows” — by three months to Feb. 14, 2025.
John Keeble | Getty Images
French video game publisher Ubisoft is facing questions over its future, as it grapples with a lackluster games pipeline and pressure from investors to seek a sale.
The company, which produces the “Assassin’s Creed” franchise, said in updated guidance last week that it has postponed the release of the next title in the popular game series — called “Assassin’s Creed Shadows” — by three months to Feb. 14, 2025.
Ubisoft also cut its guidance for the 2024-2025 fiscal year, saying it now expects net bookings to fall to around 1.95 billion euros. Ubisoft said it expects net bookings for its fiscal second quarter to come in at 350 million to 370 million euros, down from 500 million euros anticipated previously.
“The revised targets are mainly a reflection of decisions taken for Assassin’s Creed Shadows and the softer than expected launch for Star Wars Outlaws,” Ubisoft said.
It comes after the company’s “Star Wars Outlaws” game — an action-adventure title based on the iconic sci-fi movie series, which was released this summer — was met with disappointing sales performance and a mixed reception from gamers. Ubisoft said that its learnings from the Star Wars Outlaws release pushed it to give more time to polish Assassin’s Creed Shadows.
The company said it was also scrapping plans to release its new Assassin’s Creed game with a “Season Pass,” which was a paid add-on providing access to a bonus quest and additional downloadable content at launch.
Ubisoft added that it now plans to release Assassin’s Creed Shadows on Valve Corporation’s online games store Steam on the day of its launch, ending its track record of exclusively distributing PC versions of its games on Epic Games’ digital storefront.
Yves Guillemot, CEO and co-founder of Ubisoft, speaks at the Ubisoft Forward livestream event in Los Angeles, California, on June 12, 2023.
Robyn Beck | AFP | Getty Images
“In the light of recent challenges, we acknowledge the need for greater efficiency while delighting players,” Ubisoft CEO Yves Guillemot said in the statement last week, adding that the company’s executive committee is launching a review to further improve its execution.
Ubisoft shares have slumped to decade-lows against this backdrop of dismal investor expectations about its triple-A games pipeline and financial prospects.
To further compound the business’ woes, the company is facing possible strike action in France after the country’s STJV video game workers’ union called for three days of industrial action on Oct. 15-17 over the company’s bid to get workers back in the office three days a week.
Pressure from activist investor
Following the decision to delay its upcoming Assassin’s Creed game, AJ Investments, an activist investor with a less than 1% stake in Ubisoft, said that it was working with other shareholders in the company to push the French firm to sell itself to private equity firms or to Chinese gaming giant Tencent.
Tencent owns a roughly 10% stake in Ubisoft.
In an open letter last week, AJ Investments said it had gathered the support of 10% of Ubisoft shareholders for its pressure campaign, adding that it intends to cooperate with proxy advisory firms in preparation for voting at the company’s next general meeting. CNBC could not independently verify this figure.
“We have talked to industry experts as potential boards members and executives to replace current management and realise our strategy targets, we will propose our candidates due time,” AJ Investments said.
AJ Investments noted it is due to speak with Ubisoft management on Tuesday to discuss its proposals. The firm added it would demonstrate in front of Ubisoft’s headquarters in Montreuil, Paris, if needed.
Several bank analysts slashed their price targets for Ubisoft after news of the delays to its upcoming game, although many kept their ratings unchanged.
Deutsche Bank, which downgrade the stock to “hold” from “buy,” said that Ubisoft’s guidance cut was “bigger than we expected” and that the postponement to Assassin’s Creed Shadows “pushes a substantial amount of revenue” out into the next fiscal year.
Deutsche Bank’s George Brown also said he anticipated Assassin’s Creed Shadows will perform worse than he expected initially, forecasting unit sales of 7 million in the 12-month period following release. That’s down from a projection of 8 million, previously.
Meanwhile, JPMorgan said in a note last week that they now expect lower unit sales of Ubisoft’s triple-A game releases and see a slower cadence of releases moving forward. JPMorgan maintained its “neutral” rating on Ubisoft stock, but cut its price target to 11 euros from 21 euros.
“Mid-size developers continue to be squeezed by development cost inflation which has not been matched by sufficient volume/ monetization improvement to sustain attractive returns,” JPMorgan analysts Daniel Kerven and David W Peat said in the note.
“UBI’s capital structure and lack of cash generation in recent years have left it under increasing pressure to cut investments/costs.”
Backlash
Still, some analysts were more sympathetic to Ubisoft’s struggles.
Analysts at Wedbush Securities suggested the firm had become the victim of coordinated “trolling” from people trying to force down user score averages for the company’s Star Wars Outlaws game on review sites.
“We believe Star Wars Outlaws was impacted by a coordinated effort that sought to troll Ubisoft games specifically and Star Wars content in general,” Wedbush analysts Michael Pachter, Alicia Reese and Kade Bar wrote in the note last week.
“The game received an unusual number of user reviews with a clear negative bias (including a large percentage of “zero” reviews), despite seeing acceptable review scores from reputable review sites. This is a case of a rare incel victory that led to Ubisoft having to take down its numbers,” they added.
Wedbush’s analysts said that, despite delays to its upcoming Assassin’s Creed title, they expect the game to sell 7 million units in its launch quarter and think it has “potential to be one of Ubisoft’s best sellers ever.”
Industry slump
Ubisoft’s woes comes as the broader video games space is facing an industry-wide slump.
The global games market is set to grow only 2.1% year-over-year in 2024, according to research firm Newzoo. That’s up from 0.5% growth in 2023, but no where near the surging growth levels witnessed during the 2020 and 2021 Covid-19 pandemic years.
James Lockyer, technology research analyst at U.K. investment bank Peel Hunt, said that part of the problem for game publishers today is that gamers are devoting more of their time to older games than to newer titles.
“In the years that followed Covid, the number of games released per year has grown substantially,” Lockyer told CNBC via email. “Consequently, consumers have had more choice over the last couple of years.”
“However, more choice plus a cost-of-living squeezed wallet has meant consumers’ cash has been spread more thinly, leading to revenues and ROIs [return on investment] of those games often coming out below expectations,” he added.
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Palo Alto Networks signage displays on the screen at the Nasdaq Market in New York City, U.S., March 25, 2025.
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Palo Alto Networks announced on Monday its intent to acquire Protect AI, a startup specializing in securing artificial intelligence and machine learning applications, for an undisclosed sum.
The deal is set to close by the first quarter of fiscal year 2026.
“By extending our AI security capabilities to include Protect AI’s innovative solutions for Securing for AI, businesses will be able to build AI applications with comprehensive security,” said Anand Oswal, senior vice president and general manager of network security at Palo Alto Networks, in a release.
Palo Alto has been steadily bolstering its artificial intelligence systems to confront increasingly sophisticated cyber threats. The use of rapidly built ecosystems of AI models by large enterprises and government organizations has created new vulnerabilities. The company said those risks require purpose-built defenses beyond conventional cybersecurity.
The acquisition would fold Protect AI’s solutions and team into Palo Alto’s newly announced Prisma AIRS platform. Palo Alto said Protect AI has established itself as a key player in what it called a “critical new area of security.”
Protect AI’s CEO Ian Swanson said joining Palo Alto would allow the company to “scale our mission of making the AI landscape more secure for users and organizations of all sizes.”
The company’s stock price is up 23% in the past year lifting its market cap close to $120 billion. Palo Alto reports third-quarter earnings on May 21.
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Technology
Cloud software vendors Atlassian, Snowflake and Workday are betting on security startup Veza
From left, Veza founders Rob Whitcher, Tarun Thakur and Maohua Lu.
Veza
Tech giants like Google, Amazon, Microsoft and Nvidia have captured headlines in recent years for their massive investments in artificial intelligence startups like OpenAI and Anthropic.
But when it comes to corporate investing by tech companies, cloud software vendors are getting aggressive as well. And in some cases they’re banding together.
Veza, whose software helps companies manage the various internal technologies that employees can access, has just raised $108 million in a financing round that included participation from software vendors Atlassian, Snowflake and Workday.
New Enterprise Associates led the round, which values Veza at just over $800 million, including the fresh capital.
For two years, Snowflake’s managers have used Veza to check who has read and write access, Harsha Kapre, director of the data analytics software company’s venture group told CNBC. It sits alongside a host of other cloud solutions the company uses.
“We have Workday, we have Salesforce — we have all these things,” Kapre said. “What Veza really unlocks for us is understanding who has access and determining who should have access.”
Kapre said that “over-provisioning,” or allowing too many people access to too much stuff, “raises the odds of an attack, because there’s just a lot of stuff that no one is even paying attention to.”
With Veza, administrators can check which employees and automated accounts have authorization to see corporate data, while managing policies for new hires and departures. Managers can approve or reject existing permissions in the software.
Veza says it has built hooks into more than 250 technologies, including Snowflake.
The funding lands at a challenging time for traditional venture firms. Since inflation started soaring in late 2021 and was followed by rising interest rates, startup exits have cooled dramatically, meaning venture firms are struggling to generate returns.
Wall Street was banking on a revival in the initial public offering market with President Donald Trump’s return to the White House, but the president’s sweeping tariff proposals led several companies to delay their offerings.
That all means startup investors have to preserve their cash as well.
In the first quarter, venture firms made 7,551 deals, down from more than 11,000 in the same quarter a year ago, according to a report from researcher PitchBook.
Corporate venture operates differently as the capital comes from the parent company and many investments are strategic, not just about generating financial returns.
Atlassian’s standard agreement asks that portfolio companies disclose each quarter the percentage of a startup’s customers that integrate with Atlassian. Snowflake looks at how much extra product consumption of its own technology occurs as a result of its startup investments, Kapre said, adding that the company has increased its pace of deal-making in the past year.
‘Sleeping industry’
Within the tech startup world, Veza is also in a relatively advantageous spot, because the proliferation of cyberattacks has lifted the importance of next-generation security software.
On the public markets, the First Trust Nasdaq Cybersecurity ETF, which includes CrowdStrike and Palo Alto Networks, is up 3% so far this year, compared with a 10% drop in the Nasdaq.
Veza’s technology runs across a variety of security areas tied to identity and access. In access management, Microsoft is the leader, and Okta is the challenger. Veza isn’t directly competing there, and is instead focused on visibility, an area where other players in and around the space lack technology, said Brian Guthrie, an analyst at Gartner.
Tarun Thakur, Veza’s co-founder and CEO, said his company’s software has become a key part of the ecosystem as other security vendors have started seeing permissions and entitlements as a place to gain broad access to corporate networks.
“We have woken up a sleeping industry,” Thakur, who helped start the company in 2020, said in an interview.
Thakur’s home in Los Gatos, California, doubles as headquarters for the startup, which employs 200 people. It isn’t disclosing revenue figures but says sales more than doubled in the fiscal year that ended in January. Customers include AMD, CrowdStrike and Intuit.
Guthrie said enterprises started recognizing that they needed stronger visibility about two years ago.
“I think it’s because of the number of identities,” he said. Companies realized they had an audit problem or “an account that got compromised,” Guthrie said.
AI agents create a new challenge. Last week Microsoft published a report that advised organizations to figure out the proper ratio of agents to humans.
Veza is building enhancements to enable richer support for agent identities, Thakur said. The new funding will also help Veza expand in the U.S. government and internationally and build more integrations, he said.
Peter Lenke, head of Atlassian’s venture arm, said his company isn’t yet a paying Veza client.
“There’s always potential down the road,” he said. Lenke said he heard about Veza from another investor well before the new round and decided to pursue a stake when the opportunity arose.
Lenke said that startups benefit from Atlassian investments because the company “has a large footprint” inside of enterprises.
“I think there’s a great symbiotic match there,” he said.
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