By Scott Kanowsky
Investing.com -- Shares in Frontier Developments plc (LON: FDEV ) shed as much as 42% of their value on Monday, dragging peer Ubisoft Entertainment (EPA: UBIP ) lower, after the British video game maker warned that it will not reach consensus annual top-line estimates due to weak sales of key titles over the holiday season.
The company said it does now plans to deliver revenue of no less than £100 million in its 2023 financial year, well below analysts' expectations of £135M. Sales came in at £114M in the prior year.
The revised outlook comes after demand for its F1 Manager 2022 game fell "materially below" its anticipated level, while sales of other titles like Planet Coaster and Jurassic World Evolution also missed estimates. The firm said sales were hit by elevated prices weighing on player purchases.
It is also starting a review of the return on investment from its Frontier Foundry unit, which partners with other studios to develop new games. Foundry has no titles set for release in 2024.
Analysts at Liberum cut their rating of the stock to hold from buy and lowered their price target, citing uncertainties around Foundry and broader macroeconomic risks.
The slide in AIM-listed Frontier Developments shares negatively impacted France's Ubisoft, which fell towards the bottom of the pan-European Stoxx 600 .
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