Ubisoft, a well-known video game company, has started the year of 2023 with some dire news. The company announced that its highly-anticipated pirate action game, Skull and Bones, has been delayed for the sixth time, and that several recently-released titles, including Mario + Rabbids: Sparks of Hope and Just Dance 2023, have underperformed. Due to these factors and economic pressure, Ubisoft has also been forced to cancel three announced games.
In its latest financial report, the company acknowledged the challenges it is facing as the games industry shifts towards “mega-brands and long-lasting titles that can reach players across the globe, across platforms and business models.” Single-player franchises such as Assassin’s Creed and Far Cry, as well as multiplayer titles such as Tom Clancy’s Rainbow Six and The Division, remain a priority for the company. However, newer titles in these franchises that adopt “converging trends” have yet to be released, contributing to a decline in profits and revenue.
In light of these changes and worsening macroeconomic conditions, Ubisoft has decided to cancel three games in the development pipeline, in addition to the four titles that were already announced to be cancelled in July 2022. The company did not reveal much information about the newly cancelled games, as they were not public-facing prior to being removed from Ubisoft’s future plans.
In an effort to improve its long-term growth and value-creation prospects, Ubisoft announced that it will be focusing its energy on building its brands and live services into some of the most powerful in the industry. As a result, the company has decided to cancel three unannounced projects, in addition to the four that were already announced in July 2022. Additionally, the company will be depreciating around €500 million of capitalized R&D for upcoming premium and Free-to-Play games and the newly cancelled titles.
Yves Guillemot, co-founder and CEO of Ubisoft, expressed disappointment about these changes and the company’s difficult financial year. He cited the underperformance of Just Dance 2023 and Mario + Rabbids: Sparks of Hope as a surprise and a core reason for the company’s planned future pivots. He stated, “We are clearly disappointed by our recent performance. We are facing contrasted market dynamics as the industry continues to shift towards mega-brands and everlasting live games, in the context of worsening economic conditions affecting consumer spending.
Despite having received high ratings and positive feedback from players, as well as an ambitious marketing plan, Ubisoft was surprised by the underperformance of Mario + Rabbids: Sparks of Hope in the final weeks of 2022 and early January. The company also saw similar underperformance in Just Dance 2023. With the approval of the Board of Directors, the company has decided to take additional important strategic and operational decisions.
Due to these internal and external changes, the company has revised its Q3 22-23 net bookings target from €830 million to €725 million. This reflects the more challenging economic environment in 2023, according to Ubisoft.
Given the usual secrecy around cancelled video games, it is likely that we will not hear much more about Ubisoft’s cancelled projects. Currently, it appears that the company is cutting its losses and shifting its focus to its flagship franchises, including newer titles such as Skull and Bones and Avatar: Frontiers of Pandora, which are both expected to be launched by 2024.