Star Metro - Ubisoft counts cost of restructuring with record annual loss

The "Assassin's Creed" and "Rayman" developer had warned in January of the likely impact, with seven games cancelled and six delayed.

Ubisoft's plans will group together half of its development studios into five structures dubbed "creative houses", while the rest will move into support functions.

The latest results suggest the upheaval will be a last chance for the group to secure its position in a games market that has become ultra-competitive in recent years.

"This two-year transformation comes with difficult decisions and a disappointing short-term financial performance," Ubisoft founder and chief executive Yves Guillemot said in a statement.

The restructuring is flanked by a drive to find 200 million euros of annual savings over two years, coming on top of a previous squeeze of 300 million.

Belt-tightening measures have included studio closures, including one in Canada's Halifax, and layoffs across much of Ubisoft's global network incuding Sweden, Finland and the United States.

In its French home base, the group is letting 200 staff go in voluntary departures from its Paris HQ.

- Gauntlet ahead -

In its fourth quarter, Ubisoft reported a 54-percent year-on-year plunge in net bookings, to 415 million euros.

And over the full year, the revenue indicator fell 17.4 percent, to just over 1.5 billion euros.

Ubisoft's headcount numbered around 16,700 in late March, after shedding around 1,200 jobs in a year and 4,000 since September 2022.

Futher pain is likely ahead in 2026-27.

Guillemot said that this financial year would likely be a "low point" in Ubisoft's performance given "a softer release slate and restructuring costs".

The group expects both a "high single-digit percentage" fall in "net bookings", its preferred sales yardstick that excludes deferred revenues, and a "high single-digit negative" operating margin.

Its outlook is likely to further discourage investors, after Ubisoft's share price has halved over the past year.

The stock had its worst-ever day on markets when the company announced its reorganisation in January.

And Ubisoft faces rising discontent among French employees, hundreds of whom went on strike in February over new restrictions on working from home.

- AI hopes -

Ubisoft had no major releases during the 2025-26 financial year apart from strategy game "Anno 117: Pax Romana".

One upcoming bright spot is the July 9 release of "Assassin's Creed Black Flag Resynced" -- a remake of one of its flagship franchises' best-loved instalments.

It has also trailed several unannounced "premium games based on established Ubisoft brands".

The company is hoping for a rebound starting in 2027, when new titles should begin landing from key series like "Assassin's Creed" and "Far Cry".

Along with "Rainbow Six", those two franchises have been brought together under Vantage Studios, the first of Ubisoft's creative houses to be named.

The unit, valued at more than four billion euros, has also received investment from Chinese internet giant Tencent.

Ubisoft is also looking to use artificial intelligence "to enhance player experience and boost teams' efficiency and creativity".

The group late last year unveiled generative AI-powered "Teammates", computer-controlled buddies supposed to join in matches with human players.

P.Beaulieu--SMC