TL;DR
- Ubisoft is restructuring its business, cancelling games and cutting costs.
- The move reflects the struggles of traditional AAA game models in a battle-pass-driven market.
What’s going on?
Last week, Ubisoft announced a major restructuring of its business. The company describes this as a “reset” aimed at restoring growth and long-term stability.
The announcement follows several difficult years marked by delayed releases, cancelled projects and rising development costs.
Why Ubisoft is under pressure
Making AAA games, big-budget titles built by large studios over several years, now costs more and takes longer than ever.
Player behaviour has also changed. Instead of buying new full-price games each year, many players now spend most of their time in live-service titles like Fortnite, where players return regularly for updates, seasons, and battle passes.
As a result, Ubisoft’s traditional business model has come under strain.
How the restructure actually works
For Ubisoft, this means cutting parts of the business that no longer make financial sense.
That typically includes:
- Cancelling expensive projects that are unlikely to deliver strong returns
- Closing or selling studios to reduce overheads
- Cutting long-term fixed costs such as salaries, offices and development spend
Ubisoft has already cancelled the production of six games and is reviewing its studio footprint as part of this process. The aim is to reduce fixed costs (approx 500 million), not just make short-term savings permanent.
What Ubisoft is doubling down on
Ubisoft is now focusing its resources on franchises with large, loyal player bases.
These include:
- Open-world series such as Assassin’s Creed and Far Cry
- Live-service games like Rainbow Six, The Division and The Crew
These games are expensive to make, but they can generate revenue for years if players remain engaged.
What legal work sits behind a restructure like this?.
Employment Team
- They would advise on studio closures and layoffs, and handle consultations, notice periods, and redundancy processes.
- Union and staff consultations: in Europe (especially France), companies must consult employee representatives before jobs or studios can be cut.
Restructuring Teams
- Help reorganise the business, including moving teams and studios into new parts of the company.
- They also update who reports to whom, so decision-making and responsibility align with the new structure.
Contracts and intellectual property (IP)
- Commercial and IP teams review contracts when games are cancelled or studios are sold, including development and outsourcing agreements.
- They also protect IP, ensuring key franchises and game rights remain with Ubisoft and avoiding disputes.
Capital markets
- Capital markets teams advise on what Ubisoft must tell investors during the restructuring.
- This includes profit warnings and outlook updates, such as Ubisoft informing the market that it expects to make an operating loss while the restructuring is underway.
Future Outlook
The restructuring is a necessary move for Ubisoft.
Unlike rivals such as Take-Two Interactive, which can rely on Rockstar’s long-running GTA Online and 2K’s annual sports titles, Ubisoft does not have a true cash-cow franchise.
That means it often relies on flagship releases like Assassin’s Creed landing successfully.
Focusing resources on its strongest franchises and cutting costs should reduce risk and improve stability over time, even if the short-term impact is painful.