3 unannounced games are cancelled, their sales are “slower” and multi-million dollar cost reduction

We were already aware of the bad situation that Ubisoft was going through, so much so that Tencent even had to intervene. The French company already canceled several unannounced games last year, in addition to delaying Skull and Bones and more. Even so, Ubisoft wanted to give a twist to the economic situation announcing new Assassin’s Creed that are yet to come.

Today we can offer a new update on the Ubisoft situation thanks to the latest report from stephen totilo, Axios journalist. The professional points to your Twitter account that Ubisoft is facing some “sales surprisingly slower“. This aspect will be conditioned by the few releases that we have received from Ubisoft in the last year, with the exception of Mario + Rabbids Sparks of Hope, Just Dance 2023 and a Rainbow Six Extraction that has not penetrated the market.

In addition, the journalist also points out that the French company has canceled three other unannounced games (More apart from the 4 that we have mentioned in the first paragraph). In this way, Ubisoft plans to deal with this situation. reducing costs of 200 million dollars. To all this we must add that they will try to reduce expenses through “usual natural wear and tear” and with the “divestment of non-essential assets.”

Ubisoft has shared a document on its long-term strategies in which it delves into all these issues. They emphasize that they are going to “depreciate about 500 million euros of capitalized R&Drelated to the next premium and Free-to-Play games and recently canceled titles”. Even so, it should be noted that within Ubisoft there is still a wear and tear on part of the staff due to the latest problems they reported.

Ubisoft has acknowledged that its strategy for the last 4 years was create games as a service for their franchises most powerful: Assassin’s Creed, Far Cry, Tom Clancy’s Ghost Recon, Tom Clancy’s Rainbow Six and Tom Clancy’s The Division. However, these projects have not yet come onto the market, which has affected their strong initial investment. In addition, we must add that his latest releases have not had the expected performance.

Poor sales in Mario + Rabbids: Sparks of Hope and Just Dance 2023

Skull and Bones

All these reasons have been more than enough for Yves Guillemot, CEO of Ubisoft, to express himself: “We are clearly disappointed by our recent results. We are facing contrasting market dynamics as the industry continues to shift towards mega-brands and long-running live gaming, in a ccontext of worsening economic conditions that affects consumer spending.

“Despite excellent viewership and player reception, as well as an ambitious marketing plan, we were surprised by the poor performance of Mario + Rabbids: Sparks of Hope in the last weeks of 2022 and at the beginning of January. Just Dance 2023 also got bad results. It is critical to continue to adapt our organization, further strengthen our execution, and ensure both the delivering amazing games to players as a great creation of value”, highlights the French executive.

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Guillemot is optimistic despite everything: “The prospects from industry to long term they still are promising, and I am convinced that Ubisoft is well positioned to benefit from this momentum thanks to the strength of our teams, brands, production capacity, technology and balance sheet. Our backlog continues to be very healthy, with remarkably robust activity on Rainbow Six Siege, great momentum for our Assassin’s Creed games, and generally strong performance from our live games.”

“We hope that our strategy for create long-lasting live games and transform our most important brands into true global phenomena with multiple offerings across platforms and business models, ultimately generating significant value creation, with a strong growth in gross revenue and operating income in the coming years”, concludes the CEO of Ubisoft.

Just Dance 2023

In this way, your aim for the third quarter of fiscal year 2022-23 is enter “725 million euroscompared to the previous target of approximately 830 million euros”. However, they admit that this “reflects the more challenging environment mentioned above”. Ubisoft’s balance sheet is still quite solid, agglutinating “around 1,500 million euros in cash“.

Frédéric Duguet, Chief Financial Officer, has brought more hope to this situation: “Our decisive reaction and our measures additional cost optimization should help us navigate the current difficult economic environment and ensure a more agile organization in the coming years”.

Assassin's Creed

“Leveraging the largest portfolio of games in Ubisoft’s history, Assassin’s Creed Mirage, Avatar: Frontiers of Pandora, Skull and Bones and other yet to be announced premium games will be released in 2023-24, including a large oneas well as promising Free-to-Play titles for some of our main brands”, conclude the Ubisoft executives.