Ubisoft on the Brink A Deep Dive into the Company's Decline
We need to talk about Ubisoft. For a while now, discussions about the company's potential collapse have been circulating, often met with resistance from fans who still enjoy their titles. However, the numbers don't lie. With stock prices dipping below the $1 mark, the situation has moved beyond simple criticism to a genuine financial crisis. How did a titan of the industry get here, and does it have a future
The Numbers Don't Add Up
The current games show a complete mismatch between their sales numbers and their actual profit margins. The game Assassin's Creed Shadows serves as a demonstration. The game which cost over $200 million to produce has sold more than 4 million copies yet the actual profit becomes impossible to achieve after you consider the expenses for advertising and ongoing development and operational expenses. The company has changed from its prosperous period between 2018 and 2021 which saw success from Far Cry 5 and Assassin's Creed Odyssey to its current state of decline.
Three Pillars of Failure
The company has witnessed a quick decline because of these three major elements:
- Quantity Over Quality Ubisoft adopted a Call of dutty like approach, churning out annual sequels for franchises like Assassin's Creed and Far Cry. The constant product release created player burnout because new content arrived without bringing actual gameplay improvements.
- The fans have been demanding that the company should bring back their favorite series which includes Prince of Persia and Rayman and Splinter Cell. The company chose to let its tactical and platforming classics sit unused instead of bringing them back into development.
- Identity Politics and Management The company has faced its biggest challenges because of its new hiring methods and its shift toward different artistic directions. Critics argue that social agendas which take precedence over competence and gameplay quality have driven away many core gamers from the company. The cultural war extended beyond the games because the company used extreme methods to protect itself from valid criticism which resulted in more damage to its brand image.
Microtransactions and the Live Service Trap
The company decided to implement live service systems which are combined with aggressive monetization systems but these choices ended up backfiring against the company. The creation of single-player games with microtransactions for cosmetic items and paywall content restrictions made developers focus on revenue generation instead of creating engaging storytelling experiences. The company succeeded with Rainbow Six Siege yet their decision to apply this business model across all video game categories resulted in losing distinct characters from their major product lines.
A Last Ditch Effort Restructuring
Ubisoft has initiated an extensive internal reorganization which will establish five independent "Creative Houses" to operate as separate entities in a bid to recover from its current financial situation:
- Core AAAA Titles Dedicated solely to managing behemoths like Assassin's Creed and Far Cry.
- Competitive Shooters Focusing on Rainbow Six and Ghost Recon (and theoretically Splinter Cell, despite its absence).
- Live Experience Handling online-centric games like For Honor and The Crew.
- Fantasy and Strategy Anno, Might & Magic, and Prince of Persia find their home within this category.
- Casual Games Managing reliable earners like Just Dance and mobile titles.
The organization has chosen to cancel multiple projects while pushing back production for various projects which include Prince of Persia The Sands of Time remake and Beyond Good & Evil 2.
Whether Ubisoft disappears, gets absorbed, or manages a miraculous recovery remains to be seen, but the current path is unsustainable.
