Ubisoft cuts targets as Ghost Recon Breakpoint fails to impress

Adds details on outlook for 2019-20 and 2020-21

Oct 24 (Reuters) - France's game maker Ubisoft UBIP.PA slashed its annual profits targets on Thursday due to the lukewarm performance of its recently published Ghost Recon Breakpointgame and expected publishing delays for other games.

The company, known for its best-selling Assassin's Creed franchise, now sees non-IFRS operating income at between 20 million euros and 50 million euros ($22.2 million-$55.5 million) with annual net bookings of about 1.45 billion euros, compared with 480 million euros in operating income and around 2.19 billion net bookings expected before.

The profit warning resulted from a "sharp downward revision in the revenues expected from Ghost Recon Breakpoint and, to a lesser extent, The Division 2," Ubisoft said.

"We have not capitalized on the potential of our latest two AAA releases. For Ghost Recon Breakpoint, while the game’s quality appeared on track – based on E3, Gamescom, previews and our latest internal playtests –, critical reception and sales during the game's first weeks were very disappointing," Ubisoft's CEO Yves Guillemot said in a statement.

He cited too short a time between live multiplayer games releases, not enough "differentiation factors" in Breakpoint, and players' rejection of game play innovations as reasons for the reduced targets.

"We are tackling these issues head-on and already are implementing significant changes to our production processes," he said.

As a result, Ubisoft decided to increase development time for its Gods & Monsters, Rainbow Six Quarantine and Watch_Dogs Legion games, postponing their releases to the next fiscal year.

This delay leads to "a very strong line-up in fiscal 2020-21, with the release of five AAA games", Ubisoft said, targeting net bookings of 2.60 billion euros for 2020-21 and non-IFRS operating income of about 600 million euros.

($1 = 0.9013 euros)

(Reporting by Piotr Lipinski in Gdansk; Editing by Dan Grebler)

((piotr.lipinski@thomsonreuters.com; +48 58 778 52 26;))

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