By issuing an important profit warning in January, Ubisoft had warned that its fiscal year 2022-2023 would be disappointing to say the least. The publication on Tuesday of its financial performance for this financial year, ended March 31, 2022, confirms this. Group revenues, of 1.7 billion euros, fell by 18.2% in one year. The drop even exceeds 50% in the fourth quarter. The annual operating profit went into the scarlet red with a record loss of 500 million euros, against a profit of 400 million the previous year...
This underperformance is explained by the very low number of games released by Ubisoft this year. From Avatar: Frontiers of Pandora to Skull and Bones, the group preferred to postpone by several months blockbusters that had not reached the desired quality. Worse, the few games marketed have not met with the expected success. Mario and the Rabbids: Sparks of Hope, created in collaboration with Nintendo, has thus "underperformed", had announced in January the CEO, Yves Guillemot.
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But this bad pass will soon be forgotten, promises Ubisoft. This year, "difficult for the group", was also "a pivotal year", says today the leader. The publisher has begun its first large-scale savings plan, with 200 million euros in cost reductions over two years. The first tangible effect is downsizing.
The number of employees fell below 20,000 from 20,700 in September. The group points out that 80% of this decrease is due to the non-replacement of natural departures. But redundancies have also taken place. Sixty employees working for customer service have just been laid off in the United States and the United Kingdom. Ubisoft has also closed five sales offices in Europe. Another cost-saving measure: stopping the development of three games.
Upcoming release of free-to-play games
In addition to this belt tightening, the group promises that the fruits of its transformation plan, begun three years ago, will finally be seen in the coming months. This strategy, which aims to maximize the potential audience for Ubisoft games, is reflected in a tightening of its catalog on a handful of franchises and an expansion towards the "free-to-play" business model (free play with paid options) on both PC and mobile.
As a concrete illustration of this change of course, no less than five Assassin's Creed games are planned in the near future on consoles, smartphones and even in the video games section of Netflix. As a result, "we plan to increase the number of talents working on the Assassin's Creed brand by 40%," says Yves Guillemot.
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The free-to-play strategy will also result in the declination by March 2024 of The Division and Rainbow Six licenses on smartphones. Ubisoft also announces that the free-to-play competitive online game XDefiant will be released by next spring on consoles and PC. "Mastering the know-how of free-to-play is a real challenge and we must remain cautious," said Yves Guillemot in a press release. However, internal indicators would show "that we are on the right track to bring our brands to a wider audience.
»Between these free-to-play releases and the arrival of big premium titles on consoles, including Assassin's Creed Mirage, Ubisoft expects a "strong growth" in its revenues and an operating profit of 400 million euros for the current fiscal year. He will say more about his upcoming productions on June 12 at his annual conference.
