To cut expenses and promote long-term growth, Ubisoft is enhancing its business practices
One of the biggest game publishers in the world, Ubisoft is known for its wide range of well-known trademarks and properties, including Assassin’s Creed, Far Cry, and the Tom Clancy game series. The business has, however, had difficulty exceeding expectations over the past few years, and ongoing economic challenges have prompted the organisation to make significant modifications to its business plan and financial goals for the current year.
Ubisoft announces cost-cutting measures and updated ambitions
Ubisoft has announced its updated long-term growth ambitions in a new press release, as well as the steps the company is taking in the short term to cut expenses and address the below-expected performance. Sales of two games in particular during the holidays and the first few days of January were “significantly slower than expected”: Mario + Rabbids Sparks of Hope and Just Dance 2023. For Ubisoft’s biggest brands, significant investments in games with ongoing live services over the past four years have not yet paid off.
Ubisoft’s Q3 financial projections for 2022–2023 have been reduced from €830 million net bookings to barely €725 million as a result, and the company’s full fiscal year targets are now anticipated to be down more than 10%. To position the business for long-term success and to traverse the murky waters of the economy and the video game industry, Ubisoft is making the necessary changes:
Putting a stop to three unscheduled games
Ubisoft has cancelled three more games in addition to the four unannounced games that were cancelled in July 2022. There are no specifics on what these titles might have been.
Reducing R&D that was capitalised
To account for previously abandoned games as well as forthcoming premium and free-to-play games, Ubisoft’s R&D division is depreciating up to €500 million.
Releasing three significant games in the 2023–2034 fiscal year
Assassin’s Creed: Mirage, Avatar: Frontiers of Pandora, and Skull & Bones, which is experiencing yet another delay, will all be released by Ubisoft in the upcoming fiscal year. However, Ubisoft maintains its faith in the latter game, asserting that recent playtests have led to significant advancements in Skull & Bones.
Lowering corporate expenses
To lower its business costs base by over €200 million over the next two years, Ubisoft is reorganising its organisation and selling assets. This should assist the company to avoid missing performance goals. This, according to Ubisoft, has no bearing on the company’s plans to bring on fresh talent for its most important brands and initiatives.
Ubisoft’s most recent financial update was intended to inform and prepare investors for the release of its Q3 2022–23 earnings report, which is anticipated to be made public next month. In the past, Ubisoft has created and released some of the best Xbox games, but in recent years, the company’s flagship titles have lost favour with players due to a growing disinterest in Ubisoft’s long-running, repetitive open-world games. We’ll have to wait and see how Ubisoft plans to handle these difficulties in the future.