Video game delay knocks 25% off Ubisoft stock

French videogames publisher Ubisoft saw its shares slump more than 25 percent to an eight-month low after delaying the release of two titles until next year, missing the holiday season in a hotly competitive market.

“In a world of mega-blockbusters, we have now come to the conclusion that the team needed additional time,” Yves Guillemot, chief executive of the company behind the Assassin’s Creed and Far Cry series, told investors on a conference call.

Ubisoft blamed the delays on pressure to meet consumer expectations in the $66 billion hit-driven video-games industry and said the decision would cause it to swing to an operating loss for its 2013 to 2014 fiscal year.

The announcement, in a statement after Tuesday’s market close, comes shortly after the huge success of Grand Theft Auto V, released last month by a unit of Take-Two Interactive, in which hedge-fund billionaire Carl Icahn owns a stake.

The two delayed games – dystopian hacking adventure Watch Dogs and racer The Crew – were due to launch alongside next-generation consoles from Sony and Microsoft, making the sacrifice for quality a risky one in some investors’ views.

“This is a pretty severe downward revision – these games were supposed to come out in time for Christmas,” said Gregoire Laverne, a Paris-based fund manager at Roche Brune.

“They’re being delayed for reasons of quality, which is a good thing, but companies like Ubisoft already have a tendency to restrict the amount of titles they produce. If they release fewer games they have to be a blockbuster every time, there is no room for error.”

The company now expects to report an operating loss of between 40 million euros ($54 million) and 70 million, against a previous target for a profit of 110 to 125 million.

Ubisoft also cut its sales forecast for 2013 through 2014 to between 995 million euros and 1.05 billion from a previous target of 1.42 to 1.45 billion.

Shares of Ubisoft were down 26 percent at 8.21 euros by 7.40 a.m. ET, giving it a market value of 792 million euros. The stock fell as low as 7.55 euros, its lowest since February. ($1 = 0.7406 euros)

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Video game delay knocks 25% off Ubisoft stock