As the gaming industry shifts towards mega-brands and live service games, Ubisoft, one of the world’s largest video game publishers, has been struggling during the transition to the new generation of consoles. The publisher has been plagued with controversy over toxic work conditions and has seen their share price drop significantly. Their latest sales results have been so poor that they have been forced to cancel three unannounced games and delay the highly anticipated “Skull and Bones” game yet again.
This latest news has sent Ubisoft’s share price tumbling even further, as the company has to take a significant loss of €500 million (£442m) on research and development. This has led to rumors that Ubisoft, like Activision Blizzard, is now looking to be acquired. However, according to insider Jeff Grubb, that idea has already been “laughed at” by potential suitors.
According to a tweet by Jeff Grubb ‘Ubisoft definitely, already did the rounds proposing acquisitions and mergers with other similar companies, and it mostly got laughed at. It’s just too unwieldy. Its strength was its distributed development structure, and now that is an albatross.’
Ubisoft has dozens of separate studios all around the world, from the famous Ubisoft Montreal in Canada to studios in its native France and as far afield as Ukraine, India, and China. Not all of these studios make their own games, with many just being support studios, but the problem that Grubb is implying is the main reason why Square Enix is thought to have sold its Western developers, in order to make themselves more attractive to potential buyers.
Ubisoft definitely already did the rounds proposing acquisitions and mergers with other similar companies, and it mostly got laughed at. It's just too unwieldy. Its strength was its distributed development structure, and now that is an albatross.
— Grubb (@JeffGrubb) January 11, 2023
Ubisoft CEO and co-founder Yves Guillemot have blamed “contrasted market dynamics” for the company’s struggles. As the industry continues to shift towards mega-brands and live service games, in the context of worsening economic conditions affecting consumer spending, Guillemot has stated that the company’s recent focus on live service games based on existing properties such as “The Division” and “Assassin’s Creed” is likely to continue.
The three unannounced games that have been canceled are unclear, however, the multiplayer pirate game “Skull and Bones” will no longer be released in March and is now down as merely sometime “early” in Ubisoft’s next financial year, which begins this April.
The company also specifically pointed at “Mario + Rabbids: Sparks of Hope” and “Just Dance 2023” as underperforming. It’s uncertain what Ubisoft’s future holds, but it’s clear that the company will have to make some significant changes if it wants to remain competitive in the ever-changing gaming industry.
