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Ubisoft Delays Skull And Bones, Cancels More Games, And Announces New Cuts

Ubisoft held an emergency call with investors on Wednesday to reveal that the company’s 2022 sales had fallen well below expectations and that it would be taking drastic measures going forward, including cancelling three more unannounced games, delaying Skull and Bones a few months yet again, and cutting roughly $215 million in costs over the next two years, with some of the savings coming from a smaller headcount at the over 20,000-person publisher.

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“Today more than ever, I need your full energy and commitment to ensure we get back on the path to success,” Ubisoft CEO, Yves Guillemot, wrote in an email to staff, a copy of which was viewed by Kotaku. “I am also asking that each of you be especially careful and strategic with your spending and initiatives, to ensure we’re being as efficient and lean as possible.”

Lots of publishers faced game delays during the pandemic, but Ubisoft was hit harder than most. Skull and Bones, Avatar: Frontiers of Pandora, and Assassin’s Creed Mirage were all, at one time or another, expected to ship by the end of last year. Guillemot told staff that these delays have “weighed on our costs and decreased our associated revenues.” The company is now projecting a roughly $537 million loss for the fiscal year ending in March 2023.

Skull and Bones’ development continues to be the poster child for these sorts of issues at Ubisoft. Emerging from radio silence after a major reboot to finally launch last September, it was pushed at the last minute to March of 2023 to improve and polish the gameplay in response to tester feedback. In recent months, Kotaku understands that a strike team has been setup in Ubisoft’s Paris studio to try and get the game over the finish line. However, the company maintains that Ubisoft Singapore remains the lead studio on the project.

“While Skull and Bones is now complete, we are using the remaining time until our launch to leverage feedback from our ongoing Technical Tests and upcoming open beta to polish and balance the experience,” a spokesperson for Ubisoft told Kotaku in an email. “To fully deliver on this launch we are leveraging the full power of co-developing studios already involved in the development process, including Ubisoft Paris studio. Ubisoft Singapore remains the lead studio on Skull and Bones and the team is working full speed on the game experience and the development of its robust post launch content.”

Though Guillemot told investors during today’s call that the project has been making great progress, and will now launch this spring, it has clearly not made enough to finally ship, coming up on six years after it was first revealed. Whether the game ends up being good or not, current and former developers Kotaku has spoken with as recently as last month are skeptical it can be a major seller.

Guillemot told investors a similar issue with Mario + Rabbids Sparks of Hope was one of the reasons the company is now forecasting major losses for the year. Despite a big marketing budget and critical acclaim, the game didn’t meet sales expectations coming out of the holiday. Neither did Just Dance 2023, the company’s only other major release last fall, a time of year that would normally have boasted another giant Assassin’s Creed blockbuster.

To deal with the losses, Ubisoft has now cancelled three more unannounced games in addition to the four that were previously cancelled last year. It’s also written off around $537 million of R&D costs associated with upcoming and cancelled games. And the company is planning to slice roughly $215 million in costs from its operating budget over the next two years. “This will be achieved through targeted restructuring, divesting some non-core assets and usual natural attrition,” the company told investors. “Ubisoft will continue to look at hiring highly talented people for its biggest brands and live services.”

Three current and former Ubisoft developers, who wished to remain anonymous because they were not authorized to speak about company plans, recently told Kotaku that they are already seeing cuts by way of fewer backfills for recently departed colleagues and fewer contracts getting renewed for those working on a temporary basis. They also said there were layoffs across some of Ubisoft’s U.S. locations last fall, including its San Francisco office. A spokesperson for Ubisoft said only 27 positions were eliminated as part of this “restructuring.”

Next fiscal year, which runs through March 2024, Ubisoft said it plans to release at least one additional unannounced big game besides Skull and Bones, Avatar, and Assassin’s Creed Mirage. The CEO called it “the biggest pipeline in Ubisoft history” in his email to staff and said he’s excited to share more at this year’s E3 conference in June.

But to do that it will need to avoid some of the pitfalls that have plagued current and upcoming projects even as it cuts spending. Guillemot laid responsibility for this at the feet of staff, writing, “The ball is in your court to deliver this line-up on time and at the expected level of quality, and show everyone what we are capable of achieving.”

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