LONDON, Jan 12 (Reuters Breakingviews) - The holiday quarter is traditionally a bumper one for gaming groups, as punters stay home to play. But while sales of blockbusters like Sony’s (6758.T) “God of War” have held up well this season, inflation-pinched consumers have shunned smaller titles like Ubisoft Entertainment’s (UBIP.PA) “Mario + Rabbids”.

The French group flagged on Wednesday that revenue for the year ending March would be down more than 10%, compared to previous guidance of a more than 10% increase on last year’s 2.1 billion euros. The grim outlook echoes warnings on Monday from rival Frontier Developments (FDEV.L) , which has seen its market capitalisation more than halve this week to around $230 million. Ubisoft’s shares fell 20% on Thursday, and Chief Executive Yves Guillemot now plans to focus more on its biggest franchises, such as “Assassin’s Creed”.

As consumers and companies focus on “mega-brands”, smaller firms will struggle to attract staff, and match investment. That could mean consolidation. Sony, for example, will need to bulk up in response to Microsoft’s (MSFT.O) $69 billion swoop on Activision Blizzard (ATVI.O) . Ubisoft itself has been a perennial takeover candidate. A recent agreement between the Guillemot family and China’s Tencent (0700.HK) created a shareholder pact that could control up to 29.9% of voting rights, which may frustrate any deal. However, in a tougher environment, Guillemot will need to find some way to keep his hand on the joystick. (By Oliver Taslic)

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