Ubisoft has been sailing in rough seas as of late, and this week has been particularly tumultuous for the embattled brand announcing the shutdown of their free-to-play shooter Xdefiant, and the closure of its San Francisco, Osaka, and Sydney production studios. It’s just the latest hole put in the ship of Ubisoft in a year full of broadsides and the released financials now have sharks smelling blood in the water with the Guillemot Family desperately looking for a lifeline while still maintaining control of the embattled company. Let’s take a look at how Ubisoft went from being one of the leading AAA developers in the industry to the sinking ship it is today, and see what has to be done to keep it afloat.
I also want to preface this article by saying that this will be a data-driven look at what happened in recent years, and while there will be some speculation about what happens behind closed boardroom doors, I will add the references in the article at every opportunity after the requests into my GTA Trilogy investigation. Thank you for constantly providing great feedback on my articles and videos, it helps make What’s It Like better.
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Ubisoft was living large in the early 2000s with many runaway successes of AAA titles like Rainbow Six Vegas, Assasins Creed, Splinter Cell, Far Cry, and Ghost Recon. Each of these titles managed to bring something new to gamers, crafting beautifully immersive worlds with new gameplay elements. Ubisoft started garnering a reputation to be the studio to strive to beat, testing the limits of the hardware available at the time, and pushing the boundaries in open-world exploration and storytelling. They became industry leaders posting comfortable growth every year (Source: Ubisoft) and started annualising a lot of their popular franchises, aiming to go bigger with each iteration of their leading franchises. This it would seem, would start to lead to their downfall as franchise fatigue started to set it.
Ubisoft started to get comfortable, and instead of pushing boundaries, started pushing out yearly franchises with a cookie-cutter approach. Assasins Creed Unity started this trend, and also as the first Assasins Creed on the then next-gen consoles, released in an almost unplayable state. Far Cry 4 struggled to meet Far Cry 3 total sales, and despite 5 being a hit, 6 underwhelmingly performed, appearing on sale mere months after release. The company had started shifting towards live service games, which were popular at first, and Rainbow Six Siege managed to catch lightning in a bottle and generate a lot of income for the company. Ubisoft would try to capture this again by making the Division 2 and Ghost Recon Breakpoint follow a similar live service model which would see these franchises underwhelm players and struggle sales-wise. This started becoming a trend with production costs bloating, the pandemic, and tone-deaf decisions by leadership looking to appease shareholders.
The most shocking statement came from Philippe Tremblay, Director of Subscriptions, who said at the launch of Ubisoft+ (a sort of gamepass for Ubisoft) “One of the things we saw is that gamers are used to, a little bit like DVD, having and owning their games. That’s the consumer shift that needs to happen. They got comfortable not owning their CD collection or DVD collection … So it’s about feeling comfortable with not owning your game.” this was met with universal backlash, especially considering at the time there was a heated debate about video game preservation, partly spurred on by Nintendo’s piracy lawsuits. The lack of understanding consumers was further pushed with the ill-fated launch of Skull and Bones, touted as a “AAAA” title that flopped immediately despite several beta tests providing feedback that the consumers didn’t want it as a live service. Couple this with Ubisofts obstinance to double down on the universally hated U-play platform instead of making titles available on Steam, easily the largest distribution juggernaut in the industry, which meant releases continued to fail to meet expectations. Even the Star Wars licence couldn’t turn things around as Ubisoft developed a cookie-cutter version of their open worlds with a Star Wars skin slapped on top. The biggest hit the company would take was with their Flagship series, Assasins Creed, which was delayed until 2025 following a myriad of negative coverage from stealing designs, rap music, and even the Japanese Government calling for a ban on the game. (Source: Satoshi Hamada)
All of this leads us to this week with the surprise shutdown of XDefiant, a free-to-play shooter that was confirmed to be not getting axed merely a month ago by the creative director, Mark Rubin. This knee-jerk pulling of the game and offering refunds tend to suggest that Ubisoft could be preparing for an acquisition by tidying up the books., The shutdown has also seen 277 staff laid off across its San Francisco, Osaka, and Sydney production studios. Consumer sentiment is at an all-time low, with gamers cheering on the downfall of this once-revered company, and anticipation for Assasins Creed Shadows seems to have dried up. If Ubisoft aren’t moving towards an acquisition, all hopes will be looking to Japan as Shadows will be the shining hope for Ubisoft weathering the current storm. If it fails to meet expectations, Ubisoft may very well have to be comfortable with not owning their company.
More to follow…
UPDATE
Right before publishing this article, news broke that Ubisoft is in negotiations with Chinese giant Tencent, with industry sources citing that the Guillemot Family is desperately trying to find a way to retain control while still being partially bought out, Tencent however, wants a larger stake in the company and more influence on board decisions moving forward. Things aren’t looking good for the embattled company, and with share prices rising (Source: Yahoo Finance) in the news that Tencent may take over, it would seem that the shareholders Guillemot tried to appease by turning his back on consumers, will be the very ones that will feed him to the sharks.
