Ubisoft is undergoing a massive restructuring, canceling six games including the Prince of Persia remake and splitting into five creative studios. The company aims to cut €200m in costs while facing financial challenges and potential labor disputes from gaming unions.
By Creatives Unite Newsroom
Ubisoft is scrapping six games including the Prince of Persia remake and closing two studios as part of a sweeping restructure that will divide the French gaming publisher into five independent business units.
Chief executive Yves Guillemot described the changes, announced on Tuesday, as a turning point for the company as it battles mounting losses and prepares for potential labour disputes. The reorganisation will take effect in April.
The overhaul will replace Ubisoft's centralised structure with five "Creative Houses," each running as a separate profit centre responsible for development, publishing and financial performance. Seven other games have been delayed.
The most significant division, Vantage Studios, will control Ubisoft's biggest franchises including Assassin's Creed, Far Cry and Rainbow Six. Chinese technology giant Tencent invested €1.16bn for roughly a quarter stake in the unit, completing the deal in November.
The other Creative Houses will handle multiplayer shooters such as The Division, live-service games like For Honor, narrative and strategy titles including Anno, and casual family offerings such as Just Dance.
Executive compensation at each division will be linked to performance indicators including player engagement and value creation
The Prince of Persia: The Sands of Time remake, in development for several years, is among the cancelled projects. Ubisoft also axed several unannounced titles as part of what it called stricter quality controls and tighter resource allocation.
Studios in Halifax and Stockholm will close under a cost-cutting programme targeting €200m in savings over two years. The publisher said it is exploring asset sales to shore up its finances.
Ubisoft has withdrawn previous financial guidance and now expects net bookings of around €1.5bn for the current fiscal year, with operating losses near €1bn partly due to write-offs from the cancellations and delays.
Shares fell sharply (-33% on Thursday) following the announcement as investors questioned how quickly the company can return to profitability.
French gaming unions Solidaires Informatique and STJV, which have clashed repeatedly with Ubisoft management, have strongly criticised the restructure. They point to job losses, studio closures and new return-to-office requirements that they say will dismantle remote working arrangements.
The unions argue workers are paying the price for management's strategic missteps. In past disputes they have demanded higher wages, profit-sharing schemes and guarantees on flexible working.
The restructure is Ubisoft's latest bid to reverse years of poor-performing releases and sliding investor confidence, but labour conflict now looms as the company attempts to execute the changes.
*Read More: "We want them to be the best in the world, in every segment we're in" - Ubisoft's vision for its new Creative Houses. The company's CFO and SVP of Studio Operations talk cost control, boosting staff retention and the importance of in-office working | Interview @ gamesindustry.biz
