Ubisoft announced earlier today that Skull and Bones is being delayed again, and of course we jumped at the opportunity have fun with it (opens in new tab). But the notice of the delay came as part of a much larger update that reflects the real issues at the company: Ubisoft is struggling, opting to cancel three more unannounced projects to focus on its existing brands and live services.
The gaming industry has shifted in recent years to “mega brands and long-standing titles that can reach players around the world, across different platforms and business models,” Ubisoft said in the update. Over the past four years, Ubisoft has tried to do the same with its own big properties, including Assassin’s Creed, Far Cry, Ghost Recon, Rainbow Six, and The Division. But it hasn’t paid off: games announced during the “investment phase” of this strategic shift have yet to come out, and the most recent releases fall short of expectations.
“We are clearly disappointed with our recent performance,” Ubisoft CEO Yves Guillemot said in a pronunciation (opens in new tab). “We face contrasting market dynamics as the industry continues to shift towards mega-brands and eternal live games, in the context of deteriorating economic conditions impacting consumer spending.
“Despite excellent ratings and reception from players, as well as an ambitious marketing plan, we were surprised by the underperformance of Mario + Rabbids: Sparks of Hope in the final weeks of 2022 and early January. Just Dance 2023 also underperformed.”
But Ubisoft’s problems go much deeper than a few holiday flops. At the risk of making things too simplistic, it just doesn’t seem like anything is happening. Skull and Bones is perhaps the most famous example of Ubi’s recent inability to get games out the door, but don’t forget that the three unannounced projects canceled today came just six months after Ubisoft pulled the plug. four other games in the works (opens in new tab)including Ghost Recon Frontline and Splinter Cell VR.
Frontline was a particularly stinging loss. It was revealed in 2021 as a Military themed battle royale (opens in new tab) game, presumably intended to give Ubisoft a presence alongside games like Call of Duty: Warzone, Apex Legends, Escape From Tarkov, and Hunt: Showdown. Now, not much more than a year later, Ubisoft is still looking at the success of those games from the outside, with no immediate prospect of getting in on the action itself.
But the bigger problem for Ubisoft is, well, one lot taller. The company has canned seven separate projects within one fiscal year and has nothing to prove for their absence. It also doesn’t have major live-service games, like Apex Legends or GTA Online, to keep the cash trucks rolling between releases: efforts on that front, including Ghost Recon Frontline, Hyperscape (opens in new tab)and XChallenging (opens in new tab) all have hiss while The Division: Heartland (opens in new tab), which should be out later this year, has already been almost completely forgotten. (Heartland was also delayed, by the way – it was initially supposed to go live sometime in 2021-2022.) Ubisoft’s best bet for a live service hit is probably Assassin’s Creed Infinity (opens in new tab)which sounds promising but is also years away.
Some of Ubisoft’s problems are, to be honest, just bad luck. Rainbow Six: extraction (opens in new tab)for example, was an interesting extraction shooter that fell into obscurity almost immediately after its launch in early 2022. But as we noted in December (opens in new tab), Ubisoft doesn’t even seem to make the games it already made. The remake of Prince of Persia: The Sands of Time that was supposed to come out in early 2021 seems caught in limbo (opens in new tab)and the only real news we’ve had about the Splinter Cell remake being announced in 2021 is that the director stopped (opens in new tab) in October 2022.
The bottom-line costs for Ubisoft are ugly. The company has written off about €500 million ($538 million) in capitalized research and development costs related to “upcoming premium and free-to-play games and the recently canceled titles,” essentially meaning the money spent on developing that games has been spent, is on the toilet. . It also revises its net booking target for the third quarter of the current fiscal year down from €830 million ($893 million) to €725 million ($780 million). In addition, Ubisoft aims to save an additional €200 million ($215 million) in spending over the next two years through “targeted restructuring, divesting some non-core assets and normal attrition.”
Ubisoft’s ongoing battle also makes it a tempting target for a takeover. The company successfully fought a protracted outbreak takeover bid by Vivendi in 2018, and the Guillemot family, which founded Ubisoft in 1986 and still holds a majority stake, has repeatedly emphasized its desire to “remain independent.” But Ubisoft’s share price has fallen dramatically over the past five years, from a high of $103 in July 2018 to less than $24 today, making expensive offerings like those tendered last year very hard to turn down by the Chinese powerhouse Tencent.
All of this, of course, comes on top of high-profile allegations of sexual abuse and misconduct (opens in new tab) at various Ubisoft studios, whose classes are still ongoing doesn’t seem to get through at all (opens in new tab).
It’s not necessarily a death knell for Ubisoft, but the company is clearly in a bad place. Turning that around will be a major undertaking, requiring not only cost-cutting measures, but also a meaningful change in the company’s ability to actually create and release some dang games – all while trying to convince circling sharks to to leave it alone. As we like to say in farm country, that’s going to be a tough fight to hoe.