The year 2023 is off to a bad start for Ubisoft. While we were still rejoicing a few days ago at the teasing of Splinter Cell Remakethe company issued a press release this Wednesday January 11 to “warn of its results for the fiscal year 2022-2023”. A large savings plan has indeed been decided and several projects are now affected.
Ubisoft forced to revise its ambitions downwards
The publisher was very clear when discussing its measures, starting with a reduction in production costs. First consequence, this decision involves with immediate effect the cancellation of 3 games in production which had not yet been announced to the general public.
Other repercussions, Ubisoft has decided to depreciate a sum of around 500 million euros of capitalized R&D, particularly concerning premium games and discontinued titles. In addition, Ubisoft also announces a revision of its annual net book value objective.
If growth of 10% was initially expected, the opposite is ultimately expected to occur with an expected decline of 10%, anticipating at the same time a net loss of 500 million euros for its non-IFRS operating profit ( international financial reporting standards), once morest a positive result of more than 400 million euros previously.
Ubisoft blames its losses on deteriorating macroeconomic conditions and trends during the “surprisingly slower than expected” holiday season. The studio also points out that the launch of titles such as Mario + The Rabbids: Sparks of Hope or Just Dance 2023, have not achieved the expected results.
Despite excellent ratings and player reception and an ambitious marketing plan, we were surprised by the underperformance of Mario + Rabbids: Sparks of Hope in the final weeks of 2022 and early January. Just Dance 2023 also underperformed
The 2023-2024 period will be very delicate
As the context is not the most favorable for Ubisoft, the company also wants to take the lead by projecting itself into the 2023-2024 fiscal year and forecasts non-IFRS operating profit set at “only” 400 million euros. . A sign that the studio will be cautious for many months.
Finally, bad news never comes alone, the developer also announces a new postponement for Skull and Bones. Initially scheduled for March 9, 2023, the game is now shifted to a vague period 2023/2024.
It goes without saying that the coming months will not be the easiest for Ubisoft, despite the reassuring declarations of CEO Yves Guillemot:
We expect our strategy to create persistent Live games and transform our biggest brands into truly global phenomena (…) will ultimately generate significant value creation, with strong growth in net bookings and operating income over the next few years.
