Ubisoft cancels 3 more games, issues dire update

Video game giant Ubisoft today announced project cuts and lowered its estimated operating income for the current year by $1 billion.

Why it matters: The company blamed macroeconomic conditions, suggesting other game companies might struggle similarly.

• But the cuts are part of a longer decline for Ubisoft that suggests continued dysfunction at the previously hot publisher of Assassin’s Creed.

Details: Ubisoft managers said they were canceling three unannounced games, in addition to four canceled last July.

• Net bookings, which encompass game sales, downloadable content purchases and other transactions are expected to decline 10% for the year, rather than show 10% growth, as previously forecasted.
• Ubisoft is looking for nearly $200 million in cost savings over the next two years, through “targeted restructuring, divesting some non-core assets and usual natural attrition,” according to a company press release. (A Ubisoft rep tells Axios that workers on the canceled games will shift to other projects.)
• It has also delayed March’s Skull & Bones to early in its next fiscal year, which starts in April. The pirate game has been publicly delayed several times since its 2017 debut.

What they’re saying: “We are clearly disappointed by our recent performance,” Ubisoft CEO Yves Guillemot told investors today, in a call that was announced only 20 minutes before.

• Guillemot and CFO Frederick Duguet said that inflation was giving some gamers pause and maintained that Ubisoft’s games for the 2022 holiday season, namely Mario + Rabbids Sparks of Hope, had been heavily marketed and well-reviewed.
• They said a reluctance by consumers to spend was most evident in the casual and mobile sectors of their business.

Yes, but: Ubisoft has had a conspicuously fallow run over the last two years. It has downshifted from releasing one or more massive open-world hits each fall to now going through two straight holiday seasons with just October 2021’s Far Cry 6 as its lone big-budget, multi-platform premium release.

• Its flagship Assassin’s Creed series hasn’t had a new game since 2020’s AC Valhalla, the largest gap in the series’ 15-year history.

Between the lines: Ubisoft has been in a game quality crisis since the disastrous, late-2019 lunch of the widely panned Ghost Recon Breakpoint. Morale at the company took a further hit in mid-2020 after widespread allegations of sexual misconduct at the company.

• Since then, management has promised improvement to its games and accountability in its leadership team.
• But hit releases from its teams have been scarce in recent years and company reforms remain a work in progress, according to workers and company leaders.

What’s next: Ubisoft executives swear a turnaround will happen in the coming year, as it preps the release of a smaller-scale Assassin’s Creed game subtitled Mirage, along with an open-world game based on James Cameron’s Avatar universe and one mystery “large” game.

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