What you need to know
- Games publisher Ubisoft has released an update for its overall business strategy and financial targets for fiscal year 2022-23.
- Three more unannounced games have been canceled, in addition to the four canceled in July 2022.
- The company is also depreciating €500 million in R&D costs, and restructuring to reduce business costs by over €200 million over the next two years.
- To help combat these financial struggles and challenges, Ubisoft is investing in long-term growth of its largest brands and live service games.
Ubisoft is one of the world's largest games publishers, with a swathe of notable brands and franchises across Assassin's Creed, Far Cry, and the Tom Clancy family of video games. However, the company has struggled to meet expectations over the last few years, and continued economical challenges have led the company to announce major changes to its business strategy and financial targets for the fiscal year.
Announced in a new press release, Ubisoft has detailed its renewed plans for long-term growth, and the moves the company is taking in the short-term to reduce costs and combat poorer-than-expected performance. Most notably, Mario + Rabbids Sparks of Hope and Just Dance 2023 have been met with "surprisingly slower than expected" sales throughout the holidays and the beginning of January. Major investments over the last four years in long-lasting live service games for Ubisoft's largest brands have yet to come to fruition.
This has led to Ubisoft revising its Q3 financial targets for 2022-23 from €830 million net bookings to just €725 million, while the company's full fiscal year targets are now expected to be down over 10% year-over-year rather than up 10%. In an effort to navigate the complicated waters of the economy and the video games industry, and to set up the company for long-term growth, Ubisoft is:
- Canceling three unannounced games. In addition to the four unannounced games that were canceled in July 2022, Ubisoft has canceled three more titles. Details on what these titles may have been aren't available.
- Depreciating capitalized R&D. Ubisoft's R&D department is depreciating as much as €500 million concerning upcoming premium and free-to-play games, as well as the recently canceled titles.
- Reducing business costs. Ubisoft is restructuring its organization and divesting assets to reduce its business costs base by over €200 million over the next two years, which should help combat missed performance targets. Ubisoft mentioned that this does not affect the company's intention to hire new talent for its largest brands and projects.
- Releasing three major games in fiscal year 2023-34. The next fiscal year for Ubisoft will include Assassin's Creed: Mirage, Avatar: Frontiers of Pandora, and Skull & Bones, which is being affected by another delay. Ubisoft remains confident in the latter game, however, claiming that recent playtests have resulted in major improvements in Skull & Bones.
Ubisoft is expected to announce its Q3 2022-23 earnings report next month, with its most recent financials update aimed at preparing and informing investors. Ubisoft has developed and published many of the best Xbox games in the past, but recent years has seen the company's flagship games fall out of favor with gamers due to increased apathy regarding Ubisoft's long-running formulaic open-world games. It remains to be seen how Ubisoft intends to address these challenges moving forward.
Windows Central's take
I have loved many Ubisoft games in the past, but it's undeniable that each successive sequel feels increasingly similar to the entry that came before it for Ubisoft's biggest franchises, such as Assassin's Creed and Far Cry. With the greatest games progressively becoming more ambitious and innovative, and gamers in general becoming exasperated with the number of developers crafting open-world titles with little unique personality, Ubisoft has struggled to keep up.
It's never good to see games get canceled, as the work of countless people now may never see the light of day. However, if those games fell under the guidance of the Ubisoft of old, as open-world games that would feel aggressively generic in today's vibrant and competitive video games industry, then maybe it's for the best. I want to see Ubisoft invest in truly interesting games made with passion and creativity. We saw parts of that in Watch Dogs: Legion, I feel, but there's still more work to be done. Ubisoft can't keep making the same games and expect players' opinions of them to suddenly revert 10 years into the past.
