French video game maker Ubisoft increases writedowns, lowers targets on weak sales

By Mathieu Rosemain

PARIS (Reuters) -Ubisoft is increasing expected writedowns to 500 million euros ($538 million) and is cutting its full-year revenue target on weaker-than-than expected sales at the end of 2022, the French video game maker said on Wednesday.

Ubisoft cited the deterioration of the economic environment, marked by lower spending on non-essential goods to explain the acceleration of the depreciation, previously targeted at 400 million euros.

The group is also postponing the of the release of its game “Skull and Bones”, and is planning cost cuts of 200 million euros over two years, which will includes layoffs, Chief Financial Officer Frederick Duguet said in a call with reporters.

Duguet declined to elaborate on the number of job cuts. The company said it was now expecting full-year net bookings to be down by more than 10%, compared with a previous target of growth of 10%.

Chief Executive Officer Yves Guillemot said in a statement the company was surprised by the weak performance of its “Mario + Rabbids: Sparks of Hope” game at the end of last year, a crucial period for the sales of video games.

($1 = 0.9300 euros)

(Reporting by Mathieu Rosemain. Editing by Jane Merriman)