Shares in video games maker Ubisoft Entertainment (OTC:UBSFF, EPA:UBI) tanked 34% to a decade's low after the Assassin's Creed cancelled six games as part of a restructuring, including a much-anticipated 'Prince of Persia' remake.
The Paris-based computer games designer is dividing itself into five 'creative houses', it said in a statement on Wednesday night, with the aim of clamping down on costs and becoming a "more gamer-centric organization... with faster, decentralized decision-making and a greater ability to quickly adapt to players’ expectations".
Yves Guillemot, founder and CEO, said: “On the one hand, the AAA industry has become persistently more selective and competitive with rising development costs and greater challenges in creating brands. On the other hand, exceptional AAA games, when successful, have more financial potential than ever."
One studio in Canada and another in Sweden will be closed, with the five new creative divisions each focused on distinct game genres, led by dedicated teams with a unique set of expertise in those genres, each with "full financial ownership".
Ubisoft warned of a much weaker 2025-26 financial year, driven by delays to the release pipeline, postponed partnership deals, and a major reset of the portfolio, which as well as the six cancelled games also includes pushing back seven others.
As a result, the group now expects net bookings of about €1.5 billion, an EBIT loss of around €1 billion, and negative free cash flow of up to €500 million, with profits hit by a one-off €650 million accelerated depreciation linked to its transformation programme.