Ubisoft Continues Restructuring with $800 Million Cost Reduction Initiative
Ubisoft is undergoing a major restructuring as part of its $800 million cost reduction initiative. The company has announced studio closures, job cuts, and the cancellation of six video games. Additionally, the release of seven other titles has been postponed. This strategic shift aims to redefine the company’s focus in a rapidly changing gaming market.
Key Changes in Ubisoft’s Strategy
Facing challenges in the gaming industry, Ubisoft aims to cut costs through significant reductions worldwide. The French video game publisher has planned to lower its fixed costs by at least 200 million euros (approximately $325 million) over the next two years. This initiative is part of a broader effort to achieve total savings of 800 million euros (about $1 billion) by 2028.
Financial Forecasts and Operational Losses
In light of the current market conditions, Ubisoft has revised its sales projections for the third quarter of the 2025-2026 fiscal year. The updated forecast estimates revenues of 1.5 billion euros (approximately $2.4 billion CAD), down from a previous estimate of 330 million euros (around $530 million). This change comes alongside expectations of an operational loss of 1 billion euros (about $1.6 billion) for the same fiscal year.
Studio Closures and Personnel Impact
Ubisoft has already closed offices in Halifax and Stockholm, and restructured its activities in Abu Dhabi. As the company continues its efforts, it has not ruled out further studio closures, although specific details remain vague. The current global workforce stands at 17,000 employees. Ubisoft has indicated that more information regarding the impacts of these cuts will be shared in the upcoming financial results announcement.
Focus on Creative Houses
The restructuring will introduce a new decision-making model with five “Creative Houses.” These entities will oversee different game titles, ensuring accountability for product performance and player engagement. For instance, the titles in the Assassin’s Creed and Far Cry franchises will be managed by Vantage Studios, which is part of this new organizational structure.
Abandonment of Unpromising Titles
- Ubisoft has canceled six games, including a remake of Prince of Persia: The Sands of Time.
- Seven other titles, including at least one slated for 2026, have been delayed.
The decision to refocus the portfolio is influenced by a new three-year strategy concentrating on two primary categories: open-world adventure games and sustainable online environments, referred to as “Games-as-a-Service” (GaaS). This model allows for the generation of revenue through subscriptions and in-game microtransactions.
Leadership Statement
Yves Guillemot, the CEO and co-founder of Ubisoft, expressed that the strategic realignment would significantly affect the company’s short-term financial trajectory, particularly for the 2026 and 2027 fiscal years. However, he believes this restructuring will ultimately lead to sustainable growth and robust cash generation.
