Ubisoft has announced disappointing news for gamers and investors alike, revealing yet another delay to Skull and Bones and yet another round of canceled unannounced projects. Whereas the publisher canceled four games (Splinter Cell VR, Ghost Recon Frontline, and another two games) roughly six months ago, Ubisoft has now canceled another three titles. The depreciation of capitalized R&D from these titles and other upcoming premium games has been estimated to be around €500 million.
As for Skull and Bones, the long-gestating open world pirate game won't be released on March 9th. Players will instead have the chance to play a beta, while the full release isn't expected until sometime in early fiscal year 2023-24, so possibly this Summer. In their statements, Ubisoft executives mentioned challenging market situations (including macroeconomic hurdles) and underperformance by games like Mario + Rabbids: Sparks of Hope and Just Dance 2023. Net bookings for 2022-23 are now expected to go down by 10% year-over-year, whereas the company previously expected a 10% year-over-year upside. That said, the company reiterates its strong balance sheet of €1.5 billion in cash and cash equivalents.
Ubisoft's Co-Founder and CEO Yves Guillemot said in a statement:
We are clearly disappointed by our recent performance. We are facing contrasted market dynamics as the industry continues to shift towards mega-brands and everlasting live games, in the context of worsening economic conditions affecting consumer spending. Despite excellent ratings and players’ reception as well as an ambitious marketing plan, we were surprised by Mario + Rabbids: Sparks of Hope underperformance in the final weeks of 2022 and early January. Just Dance 2023 underperformed as well. Therefore, with the approval of the Board of Directors, we are taking additional important strategic and operational decisions today.
It is key to continue adapting our organization, to further strengthen our execution and to ensure we both deliver amazing games to players as well as great value creation.
The industry’s long-term prospects remain promising, and I am convinced Ubisoft is well positioned to benefit from this momentum thanks to the strength of our teams, brands, production capacity, technology, and balance sheet. Our back catalog remains very healthy, with notably robust activity on Rainbow Six Siege, great momentum for our Assassin’s Creed games, and generally solid performance from our live games. We expect our strategy to build long-lasting live games and transform our biggest brands into truly global phenomenon with multiple offerings across platforms and business models, to ultimately generate significant value creation, with strong topline and operating income growth over the coming years.
Frédéric Duguet, Ubisoft's Chief Financial Officer, added:
Our decisive reaction and our additional cost optimization measures should help us navigate the current challenging economic environment and ensure a leaner organization for the years to come. Leveraging the biggest pipeline of games in Ubisoft's history, 2023-24 will see the releases of Assassin’s Creed Mirage, Avatar: Frontiers of Pandora, Skull and Bones, and other yet-to-be-announced premium games, including a large one, as well as promising Free-to-Play titles for some of our biggest brands.
There's another big triple-A game coming in fiscal year 2023-24 from Ubisoft, then, though we don't yet know what that is.