Analyst : Deep Silver's earnings estimate adjusted from " 625m to 550m SEK in Q3’19/20e, mainly due to Shenmue III performing below our expectations."

Oct 30, 2017
2,348
Not good news for our beloved Shenmue.


Estimate revisions due to FF VII, Shenmue III & Biomutant

We lower our revenue estimate for Deep Silver from SEK 625m to SEK 550m in Q3’19/20e, mainly due to Shenmue III performing below our expectations. Furthermore, as no official release date has been announced for Biomutant, we have pencilled in a release in the next financial year instead of Q4’19/20e. Lastly, due to a delay of Square Enixs’ Final Fantasy VII remake, we now pencil in a release in Q1’20/21e instead of Q4’19/20e. See page 3 for more details.

Shenmue III

Shenmue III was released on 19 November 2019 on PlayStation 4 and the Epic Games Store. The game gathered mixed reviews amongst critics, with an averageMetacritic score of 69 on PC and 68 on PlayStation 4. However, it’s our view that actual fans of the series were very pleased with the game.
In terms of sales, we’re currently not able to track sales generated on the EpicGames Store, however we note that Shenmue III did claim a spot on the Top 20 Sellers list for several weeks. Additionally, Embracer will have received a fee for making the game exclusive to the Epic Games Store. In terms of sales on the PlayStation 4, estimates seem to suggest that the game has gatheredapproximately 50k players in Q3’19/20e4.
Ultimately, Shenmue III sales seem to have performed below our estimates, which is the reason for us lowering our revenue estimates for the Deep Silver segment.
For those questioning the legitimacy of this document:

Disclaimer
This document has been prepared by ABG Sundal Collier which is the marketing name referring to all or any of ABG Sundal Collier ASA, ABG Sundal Collier AB or ABG Sundal Collier Partners LLP and any of their affiliated or associated companies and their directors, officers, representatives and employees.
This research product is commissioned and paid for by the company covered in this report. As such, this report is deemed to constitute an acceptable minor non-monetary benefit (i.e. not investment research) as defined in MiFID II.
 

Naga

Member
Aug 29, 2019
4,102
In terms of sales, we’re currently not able to track sales generated on the EpicGames Store(...)
In terms of sales on the PlayStation 4, estimates seem to suggest that the game has gathered approximately 50k players in Q3’19/20e4.
Ultimately, Shenmue III sales seem to have performed below our estimates, which is the reason for us lowering our revenue estimates for the Deep Silver segment.
That's a weird quote.
They are unable to track sales on PC, and can't say how many sales they got on PS4, just how many players (it sounds like they're checking trophy stats)?

Aren't they supposed to know this stuff?
 

DrArchon

Member
Oct 25, 2017
12,721
How does a publisher not know what the sales are for one of their games on a specific platform?
 

Turrican3

Member
Oct 27, 2017
635
Italy
I'm a bit confused, isn't this a report from an analyst?

So if I get this right "our" isn't referring to Deep Silver, it's actually the previous analyst forecast.
 

Border

Member
Oct 25, 2017
10,368
Hilarious that they apparently expected to make 75M+ from a Shenmue game. Especially considering that all the fans had already bought the game via Kickstarter.
 

modiz

Member
Oct 8, 2018
8,601
in the end of the day even if shenmue 3 scored high it wouldnt have sold well because majority of people who wanted to play the game already backed it in 2015.
 

Kida

Member
Oct 27, 2017
514
Not a good result for Shenmue 3 but if the total including backers was 200k-300k then I don't think all hope is lost for a sequel. There are plenty of niche jRPG that survive on less sales than that.

That settles it I guess, mixed or negative reviews = haters.
Or it just means that the response from fan communities has been largely positive. Which it has.
But sure... they must be fanboys.
 

JayCeeJim

Member
Jan 3, 2019
157
I don't exactly understand what is going on. Is that estimate about Deep Silver's earnings made by Deep Silver themselves? By a company hired by Deep Silver?. Or by an entirely third party company?

And if it's the latter, is this company reliable? Who paid them to make this estimate?
 

mute

Member
Oct 25, 2017
7,330
I cannot understand how a pub could get behind a project like this post-kickstarter and expect to make a ton of money on it.

I'm thankful they did, because it probably pushed plenty more money into the game, but still. Doesn't make sense.
 

PCK

Member
Oct 26, 2018
219
The title of the thread is a bit confusing. This isn't Deep Silver's own estimation, just some third party analyst telling us what we already know.
 

AJ_Wings

Member
Oct 31, 2017
1,070
They can’t track sales of their product on the EGS... lol.

Maybe you should’ve called that genius Galyonkin before saying that in your earning’s report.

Edit: oh that’s not deep silver themselves, ok my bad.
 

NeoZeedeater

Member
Oct 27, 2017
4,029
I doubt anything would have made Shenmue III sell huge amounts but choosing ugly placeholder-looking art for its box probably didn't encourage any impulse purchases. I quite enjoyed the game despite its flaws and really hope we get a conclusion.
 

FairyEmpire

Member
Oct 25, 2017
18,191
Not a good result for Shenmue 3 but if the total including backers was 200k-300k then I don't think all hope is lost for a sequel. There are plenty of niche jRPG that survive on less sales than that.


Or it just means that the response from fan communities has been largely positive. Which it has.
But sure... they must be fanboys.
It's just a really weird thing to point out. Most of the dedicated communities tend to respond positively to games, especially in the first days/weeks/months, if shit hits the fan it tends to happen a lot later. It took quite some time before the Destiny subreddit turned against the game, for example. And I was an occasional poster on a Duke Nukem forum back when Duke Nukem Forever and, believe it or not, most Duke Nukem fans enjoyed the game despite its enormous issues. It just sounds dismissive: they point out professional reviews were worse than expected, that sales are worse than expected, but that the most dedicated fans who ended up buying it liked it according to them. Not sure how that part is gonna help with their earnings call.
 
OP
OP
bell wood's jet cola
Oct 30, 2017
2,348
The title of the thread is a bit confusing. This isn't Deep Silver's own estimation, just some third party analyst telling us what we already know.
Yes, I'd like to add Analyst to the subject line. But to be fair, it's an analyst that Embracer hired. If the 50K figure is far from the truth, why would they not just give them the real number? I could be totally ignorant of the purpose of such a report, but showing a negative projection based on false numbers isn't to Embracer's benefit?

Disclaimer
This product is commissioned and paid for by the company covered in this report. As such, this report is deemed to constitute an acceptable minor non-monetary benefit (i.e. not investment research) as defined in MiFID II.
 

Stygr

Member
Oct 26, 2017
8,664
You don't know how currencies work? Really? LMFAO

Dollar is not the only currency in thw world. 75mln SEK is not 75 mln dollars

Why the fuck such basic things have to be explained
He wrote 75M without adding currency and i assumed it's dollar.

You should drink a cup of tea and calm down.
 

Kida

Member
Oct 27, 2017
514
It's just a really weird thing to point out. Most of the dedicated communities tend to respond positively to games, especially in the first days/weeks/months, if shit hits the fan it tends to happen a lot later. It took quite some time before the Destiny subreddit turned against the game, for example. And I was an occasional poster on a Duke Nukem forum back when Duke Nukem Forever and, believe it or not, most Duke Nukem fans enjoyed the game despite its enormous issues. It just sounds dismissive: they point out professional reviews were worse than expected, that sales are worse than expected, but that the most dedicated fans who ended up buying it liked it according to them. Not sure how that part is gonna help with their earnings call.
I think they point it out to show that there is still a loyal audience for it and it wasn't a total disaster. If they can fund a Shenmue IV that can make a profit from 200k sales then it makes sense to do it. THQ Nordic/Deep Silver have a ton of niche franchises that don't make a ton of money.
 

Nora

Banned
Oct 25, 2017
3,548
No shit it sold poorly. They got a hail mary shot at a Shenmue game, it's stuck in early 2000s game design philosophy and, most damningly, barely even moved the story forward. As soon as I learned the latter, as a lapsed fan, I lost all interest. They should have wrapped it up. Suzuki isn't likely to get another shot at this ever. That's not even going into the kickstarter/epic clusterfuck.
 

mute

Member
Oct 25, 2017
7,330
Deep Silver published KCD and they made a bank, over 2 million copies sold.
I'm not sure I would consider KCD a project like this. Shenmue has been around for a long time and has an established fan base and sales record that shouldn't necessarily be expected to blow up 20 years later.
 

Naga

Member
Aug 29, 2019
4,102
Yes, I'd like to add Analyst to the subject line. But to be fair, it's an analyst that Embracer hired. If the 50K figure is far from the truth, why would they not just give them the real number? I could be totally ignorant of the purpose of such a report, but showing a negative projection based on false numbers isn't to Embracer's benefit?
They hired an analyst to do their financial report, all without giving them the actual numbers?

...What?
 
Nov 11, 2017
2,479
50k sales on ps4 holy shit? :(. Was thinking of buying it on the ps4 was hoping for an xbox release but guess I'll skip all together now that it bombed.

Games should have been on everything steam xbox ps4 and all other stores smh
 

LiS Matt

Member
Jan 19, 2018
139
Not too surprising since I have to imagine 80-90% of the superfans got in on the kickstarter
I would be interested to see how the sales did vs the collection of 1&2
 

drag00n18

Member
Dec 7, 2018
45
Not releasing on Steam and Xbox was a mistake. I played Shenmue 2 on Xbox and wanted to continue with 3 on Xbox One. I backed Shenmue 3 on Kickstarter (PS4 version) and purchased Shenmue 1&2 on both XB1 and PS4. Fans will continue to buy. As soon as Shenmue 3 is announced for Xbox I’ll buy that too just so the series continues.
 

PCK

Member
Oct 26, 2018
219
But to be fair, it's an analyst that Embracer hired. If the 50K figure is far from the truth, why would they not just give them the real number? I could be totally ignorant of the purpose of such a report, but showing a negative projection based on false numbers isn't to Embracer's benefit?
The purpose is to make your business as interesting as possible to the stock traders. But they are beholden to insider trading laws. So a company like this can make a good estimation and hype up the market, before Embracer reveals their actual numbers. Embracer correcting their analysis is therefor out of the question: it would both break the law and risk the integrity of Introduce.se.