In a dramatic turn of events, Ubisoft, the prominent French video game publisher, has seen its shares plummet by a staggering 33 per cent on Thursday. This sharp decline follows the company's announcement of a significant reorganisation and the cancellation of six upcoming titles, most notably a highly anticipated remake of Prince of Persia.
Financial Forecasts and Operational Challenges
The publisher has narrowed its net bookings forecast for 2026 to approximately €1.5 billion, a move that underscores the financial pressures it faces. More alarmingly, Ubisoft now expects an operating loss of around €1 billion for the year. Of this substantial loss, €650 million is directly attributed to the cancellations and delays of various games, highlighting the costly impact of these decisions on the company's bottom line.
In response to these challenges, Ubisoft has withdrawn its previous financial guidance for the 2026/27 fiscal year. Analysts have expressed deep concerns, noting that a return to positive cash generation appears distant and that the financial structure of the company may weaken further as a result of these setbacks.
Strategic Restructuring into Creative Houses
As part of its reorganisation, Ubisoft plans to restructure into five distinct creative divisions, which will be known as 'Creative Houses'. These divisions are designed to oversee their respective game portfolios comprehensively, from brand development through to sales, and will manage their own budgets independently. This strategic shift aims to streamline operations and foster greater creativity and efficiency within the company.
Cost-Saving Measures and Asset Sales
To mitigate the financial challenges, Ubisoft is actively pursuing an additional €200 million in cost savings over the next two years. This initiative follows a delayed €100 million cost reduction programme, indicating the urgency of the situation. Furthermore, the publisher is considering potential asset sales as another avenue to bolster its financial stability and navigate through this turbulent period.
The cancellation of the Prince of Persia remake, along with 11 other games that have been either cancelled or delayed, has sent shockwaves through the gaming industry. Fans and investors alike are closely watching Ubisoft's next moves as it seeks to recover from this significant downturn and rebuild its reputation in the competitive video game market.
