While Ubisoft’s next balance sheet was expected on February 16, management was forced to take the lead on Wednesday by organizing a conference call and issuing a press release to explain how the group’s latest results were not up to par. the height of expectations as well as the measures that have been decided. To start, Ubisoft relied mainly on two games to keep the holidays warm: Mario + The Rabbids Sparks of Hope and Just Dance 2023. Unfortunately and against all odds, the sequel to Kingdom Battle had disappointing sales, as did the new edition of the dance game that normally performs well on Switch.
“Trending over the holiday season, particularly the last weeks of December and early January, was significantly and surprisingly slower than expected. Despite excellent ratings and player reception 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“, explains CEO Yves Guillemot. And when even a big production with Mario does not meet expectations, it’s really that the stars no longer want to align. As a result, the turnover for the October-December 2022 quarter is now expected at 725 million euros against a previous target of 830 million euros, but as we will see, it is not the most annoying.
Skull and Bones waits for the wave
Postponed from November 8, 2022 to March 9, 2023, Skull and Bones drives the point home and will not even be there to close the fiscal year. If a new beta will soon welcome players, the new license announced at E3 2017 finally goes back to the beginning of the next fiscal year (April, May or June). “We believe that players will be positively surprised by its evolution“, slips Yves Guillemot. If all goes as planned, Skull and Bones will therefore be part of the same fiscal year as Assassin’s Creed Mirage, Avatar: Frontiers of Pandora and “other as yet unannounced premium games, including a sizable one, as well as promising free-to-play titles for some of our biggest brands“, can we read.
The major brands in question are mainly called Assassin’s Creed, Far Cry, Rainbow Six, Ghost Recon and The Division. It is on them that Ubisoft intends to refocus its efforts, whether by producing classic games or free-to-play games intended to generate recurring revenue. “However, games from this phase of investment have yet to launch, while our recent launches have not delivered the expected results.“, recognizes Ubisoft. And if the French publisher has relied for years on the powerful Rainbow Six Siege, the fact is that it lacks the equivalent of a phenomenon like Apex Legends, Grand Theft Auto Online or Call of Duty. : Warzone to ensure its financial strength.
Increased caution for the years to come
Faced with alarming results, Ubisoft is forced to take a series of measures, including that of limiting the risks in the years to come. Not content with having announced the cancellation of 4 games in July 2022, the group announces that it has euthanized 3 additional projects. These are unannounced games (Beyond Good & Evil 2 is therefore still very much alive) which were probably not part of the group’s essential brands or the live services that Ubisoft wishes to impose. The company also announces a depreciation of 500 million euros of capitalized R&D, which notably reflects the need to focus on a smaller number of titles.
The consequences on the results of the fiscal year will be devastating to say the least: from an operating profit of 400 million euros, Ubisoft should end the year with an operating loss of 500 million euros. Finally, Ubisoft must save money and expects a net reduction in its cost base of more than 200 million euros over the next two years. “This reduction will be achieved through targeted restructuring and the disposal of certain non-core assets“, strong words that could imply layoffs (even if the press release only mentions “natural attrition”) as well as sales of studios and / or licenses. Ubisoft, which supports some 20,000 people worldwide has so far fired 27 people in the United States, a spokesperson told Kotaku.
“Ubisoft’s financial position is strong with approximately €1.5 billion in cash and cash equivalents after repayment of the €500 million bond maturing at the end of the month“, reassures Ubisoft all the same. Remember that if the French publisher recently allowed Tencent to nibble away a larger share of its capital, the Guillemot family has taken steps to prevent any unwanted intrusion and intends to keep its destiny in its hands. , as long as it is still possible.
- Also Read | Tencent approaches Ubisoft with a new investment of 300 million euros