Bones of the skull. Screenshot: Ubisoft
Video game giant Ubisoft today announced project cuts and cut its estimated operating income for the current year by $1 billion.
Why it matters: The company blamed macroeconomic conditions, suggesting that other game companies could have similar difficulties.
- But the cutbacks are part of a longer decline for Ubisoft that suggests continued dysfunction at the once-popular Assassin’s Creed publisher.
Details: Ubisoft’s managers said they would cancel three unannounced games, on top of the four canceled last July.
- Net bookings, which encompass game sales, downloadable content purchases and other transactions, are expected to decline 10% over the year, instead of showing 10% growth as previously forecast.
- Ubisoft is seeking nearly $200 million in cost savings over the next two years, through “targeted restructuring, divestment of some non-core assets, and regular wear and tear,” according to a company press release. (A Ubisoft representative tells Axios that workers on the canceled games will switch to other projects.)
- It also pushed Skull & Bones back from March to the beginning of its next fiscal year, which begins in April. The pirated game has been publicly delayed multiple times since its debut in 2017.
What they are saying: “We are clearly disappointed by our recent performance,” Ubisoft CEO Yves Guillemot told investors today, in a call announced just 20 minutes earlier.
- Guillemot and CFO Frédéric Duguet said inflation was giving some gamers pause and maintained that Ubisoft’s games for the 2022 holiday season, namely Mario + Rabbids Spark of Hope, had been heavily marketed and well reviewed.
- They said consumers’ reluctance to spend was most evident in the casual and mobile sectors of their business.
Yes, but: Ubisoft has had a notoriously fallow career over the past two years. It’s gone from releasing one or more massive open-world hits every fall to now going through two back-to-back holiday seasons with only Far Cry October 6, 2021 being its only big-budget multi-platform premium release.
- Its flagship Assassin’s Creed series hasn’t had a new game since 2020’s AC Valhalla, the biggest gap in the series’ 15-year history.
Between lines: Ubisoft has been in a game quality crisis since the disastrous late 2019 lunch break of the widely criticized Ghost Recon Breakpoint. Morale at the company suffered a further blow in mid-2020 after widespread allegations of sexual misconduct at the company.
- Since then, management has promised to improve their games and the accountability of their leadership team.
- But successful launches by its teams have been rare in recent years and the company’s reforms remain a work in progress, according to workers and company leaders.
Whats Next: Ubisoft executives swear a change is in the offing next year as it readies 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 a game ” big” mysterious.
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