How did Ubisoft fare last year?
For many videogame enthusiasts, picking a ‘villain’ for 2014 was all too easy: Ubisoft. Several controversies and poorly-managed game releases ensured that public ire remained focussed on the company for most of the year.
As EA – elected as the worst company for the year two years running by the Consumerist – undertook a largely successful campaign to turnaround their public image, Ubisoft became the new business everybody loved to hate. Almost none of their games, both those released in 2014 and advertised for future years, escaped controversy. In a year that saw ‘gamergate’ divide the video gaming community, Ubisoft almost managed to reunite it; it certainly managed to divert a huge amount of attention from the scandal.
Was all of the negativity deserved? Yes and no. Microtransactions, DRM and locked away content (available only via an accompanying app) are all unsavoury but understandable business decisions. The clear ‘overdressing’ of pre-release footage, chronically buggy games on release and a dangerous PR strategy – including embargoes on reviews until a full 12 hours after the release of Assassin’s Creed: Unity, and responses to perceived flaws that appeared disingenuous at best – are more problematic.
Fans may put up with some of the less popular aspects of modern games, but only as long as the product they buy works, and meets the expectations set by pre-release hype. In 2014, Ubisoft failed its fans on that front more than once. Watch Dogs, Assassin’s Creed: Unity (AC:U), Far Cry 4 and The Crew all suffered bugs on launch that rendered the games unplayable for some players.
Plenty of fans have been outspoken about what they see as the biggest problem with Ubisoft: its perceived devotion to servicing the needs of its shareholders above those of its customers. If there is any truth to this accusation, was 2014 the year that Ubisoft’s unpopularity amongst core fans came to impact its share price, and force a change of strategy?
On the face of it, not massively.
Ubisoft’s shares started last year worth €10.06. At the beginning of this year, they had climbed above €15. Reporting growth of over 50% is impressive; reporting it in an economy that is struggling – France’s CAC remained flat for the year – even more so.
What would have really interested those online shares trading was that the share price was boosted by positive sales for Watch Dogs in the spring, which enabled the company to release some very strong earnings at the end of October. After that earnings call, Ubisoft’s shares leapt over 10% in just 12 hours. Assassin’s Creed, Ubisoft’s flagship series, appears to have sold strongly at its outset, but Ubisoft’s next earnings call will reveal whether the ongoing bad publicity has done real harm.
It certainly served to shake investors’ confidence, if only briefly. Ubisoft’s worst day on the markets in 2014 was the day after AC:U launched, as widespread criticism lead the stock down 9%. Back in May, Watch Dogs had a similar, if lessened, effect. The day after launch saw shares drop 5%. The company then rallied, but by August was down over 20%, a malaise only reversed by those strong earnings three months later.
There is a pattern, then. Shareholders get put off by excessive negative headlines and begin to fear for the future of a company, but can easily be swayed by the revelation that a game sold strongly despite setbacks. If fans truly want Ubisoft to change tack, they will have to act with their wallets and stop buying its games.
Perhaps, though, a happy precedent arrives in the form of previously notorious EA. EA’s two year stint as America’s worst company saw little share growth, with the company ending 2013 worth just 8% more than at the beginning of 2012. In 2014, the company made a public effort to win its fans around: and returned more than 100% growth to shareholders.
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