Ubisoft Shares Tumble on Major Restructuring, Studio Closures
Ubisoft’s stock experienced a significant downturn, plummeting by approximately 33% in early trading on Thursday. This sharp decline followed the announcement of a substantial organizational overhaul by the “Assassin’s Creed” publisher, which includes the closure of several studios and the cancellation of six upcoming game titles.
The dramatic restructuring comes after a prolonged period of stock price erosion, exacerbated by the lingering effects of the COVID-19 pandemic, delays in major game releases, and ongoing financial challenges. This strategic pivot signals a significant shift in the company’s approach to navigating a rapidly evolving and increasingly competitive gaming landscape.
In a statement released Wednesday evening, Ubisoft projected an operating loss of around €1 billion (approximately $1.17 billion) for the financial year ending 2026. This forecast accounts for a €650 million write-down stemming from the extensive restructuring efforts. The company also indicated a willingness to explore asset sales as part of its broader strategy to regain financial footing and drive future growth.
“The current market environment necessitates a fundamental change in how the Group organizes and operates,” stated Yves Guillemot, Founder and CEO of Ubisoft. He emphasized that while the portfolio refocus will undeniably impact the Group’s short-term financial trajectory, particularly in fiscal years 2026 and 2027, this reset is designed to fortify the company and pave the way for renewed sustainable growth and robust cash generation.
As part of the restructuring, Ubisoft confirmed the closure of its studios in Halifax, Canada, and Stockholm, Sweden. Additional organizational realignments are slated for studios in Abu Dhabi, Helsinki, and Malmö. These closures and adjustments are expected to streamline operations and reduce overhead across the company’s global development network.
Ubisoft anticipates that these cost-cutting measures will yield savings of approximately €500 million (around $580 million). The company aims to reduce its fixed costs to €1.25 billion (approximately $1.46 billion) on a run-rate basis by March 2028, a notable reduction from the €1.75 billion (approximately $2.35 billion) recorded in the financial year ending 2023.
Reflecting these adjustments, Ubisoft has revised its net bookings forecast for the financial year ending 2026 to around €1.5 billion (approximately $1.75 billion). This represents a downward revision of €330 million from its previously issued guidance, underscoring the significant impact of the strategic changes on its near-term financial outlook. The company’s move suggests a strategic re-evaluation of its development pipeline, prioritizing fewer, potentially more impactful titles while shedding underperforming or strategically misaligned projects. This approach is becoming increasingly common in the high-stakes gaming industry, where massive development budgets and fierce competition demand careful resource allocation and a clear vision for market success.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/16431.html
