Today Ubisoft delivered their Q1 results for fiscal year 2023, and it wasn’t good news for the French publisher. Not only was revenue down 10 percent year-on-year, but Ubisoft’s upcoming pipeline seems to be in a state of disarray. The biggest blow to the company is the delay of Avatar: Frontiers of Pandora, but during their earnings call, Ubisoft CFO Frederick Duguet confirmed several other games have been canceled or pushed back. The canceled projects include Splinter Cell VR, the F2P battle-royale-style shooter Ghost Recon Frontline, and at least two other unannounced titles.
"We also expect to maintain Fiscal ‘24 cash [research and development] to Fiscal 23 levels, versus our prior expectation for growth. This will be achieved through the stabilization of headcounts by the end of Fiscal 23 at the level of end of Fiscal 22, strength of our cross-discipline, and even more focus on our biggest development opportunities as evident by our decision to stop development of the Splinter Cell VR game, Ghost Recon Frontline, and two other unannounced titles."
Ubisoft has also opted to push back another “smaller unannounced premium game” to 2023. While Ubisoft has yet to confirm this, it’s widely speculated this is Assassin’s Creed Rift, a new more-linear title in the series that reportedly originally began as AC Valhalla DLC.
While it’s somewhat hard to decipher Ubisoft’s corporate speak above, the decision to cancel several games is largely an effort to cut costs as the publisher undertakes a “sizeable cost optimization plan.” According to Kotaku, Ubisoft CEO Yves Guillemot sent a letter to developers, warning the company would need to “strongly limit our spending.”
"In the current economic context, carefully and strategically managing our investments is critical now more than ever. We must therefore succeed in strongly limiting our spending to what is essential by questioning some of our habits and reflexes, and by reinventing ourselves together to make gains in terms of cost, agility, and efficiency."
Kotaku has already heard reports of hiring and spending freezes, and current employees receiving fewer raises. Of course, many companies are bracing for a predicted recession, but Ubisoft’s woes would seem to extend beyond that. The well-oiled Ubisoft AAA machine is faltering, and a lot is now riding on the success of the publisher's future big projects like Avatar: Frontiers of Pandora and Assassin’s Creed Infinity.
An Ubisoft Forward presentation will reveal more about the company's slate on September 10.