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Why is Ubisoft so Cheap?

Video games are a service now.

Andrew Willis 19 November, 2021 | 5:58AM
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Andrew Willis: Among the video game companies we cover, Ubisoft (UBSFY) is the most resolute about developing games with long revenue tails. That means microtransactions that many often associate with simple smartphone games for new features or cosmetics… but on triple-A blockbuster titles like Far Cry or Assassin’s Creed.

Perhaps some gamers-slash-investors don’t like that. Or they have a concern – which we share – on video game development delays when you have a company focused on games as a service.

But as senior equity analyst Neil Macker notes - 72% of net bookings in fiscal 2021 were from titles older than a year old – so what might be bad for some gamers isn’t necessarily bad for investors.

For Morningstar, I’m Andrew Willis.

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Ubisoft Entertainment28.82 EUR1.77Rating
Ubisoft Entertainment25.91 USD-7.33
Ubisoft Entertainment ADR5.42 USD-1.45

About Author

Andrew Willis

Andrew Willis  Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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