Zürcher Nachrichten - Ubisoft shares plunge after big-bang restructuring announced

Ubisoft stock plummeted more than 34 percent on the Paris market by 1:50 pm (1230 GMT), the sharpest intraday fall in the company's history.

Bosses had on Wednesday announced they would reorganise many of Ubisoft's fleet of development studios around different game genres, with the remainder offering project-by-project support.

Slated for the beginning of April, just after the 40th anniversary of the group's founding, the restructuring was flanked by cancellations for six games in development, including a remake of 2000s-era classic "Prince of Persia: The Sands of Time" hotly awaited by fans.

Seven more games have been delayed, while managers want to find a further 200 million euros ($171 million) of cost savings after paring 300 million over the past three years.

The powerhouse behind sagas like "Assassin's Creed" and "Far Cry" now forecasts a one-billion-euro operating loss for its 2025-26 financial year.

- Big bet -

"I'm very worried about the future of the group," said Cedric, an employee at Ubisoft's Paris studio who asked not to use his real name so as to speak freely.

"I can understand the idea of switching to a more financially sustainable model, but it's coming at the cost of a lot of layoffs and studio closures," he added.

In recent weeks, Ubisoft has closed development offices in Stockholm and Halifax, as well as restructuring its Abu Dhabi operation, Redlynx studio in Finland and Massive in Sweden.

Now with around 17,000 staff, Ubisoft has shed more than 3,000 in recent years.

Worker unrest could boil over in home country France, largely spared mass layoffs until now, where bosses say they want to slash work-from-home options.

"Returning to five days a week (in the office) around family life and organising parenting is impossible to imagine nowadays," Cedric of Ubisoft Paris said.

Teleworking was one flashpoint issue that brought French Ubisoft staff out on repeated strikes in 2024.

One union called on workers to walk out immediately on Thursday morning.

Bosses' plan to group studios by genre expertise is nevertheless "an excellent idea", games industry economist Laurent Michaud said.

"Ubisoft is betting on its top asset: its skilled workers," he added.

This is also not the first time the company has abandoned projects like "Prince of Persia" that it judged would not prove good or profitable enough, he added.

"Ubisoft and other major publishers have killed off games many times because the project wasn't progressing".

The action-adventure title was out of step with the 2026 games market dominated by shooters, sports and multiplayer.

- 'Survival mode' -

Other projects have escaped cancellation for now, with Ubisoft saying work is continuing on "Beyond Good and Evil 2" -- in development for 20 years.

Cancelling games means "flushing a lot of money down the toilet," said Lionel Melka, partner at Swann Capital.

And "it's going to do a lot of damage to their reputation with fans" given the "very strong emotional aspect" to players' relationships with games.

Such harsh moves show Ubisoft is "in survival mode", Melka added, fearing "a spiral where as things get worse and worse, more and more people leave".

A full-scale collapse of Ubisoft would be devastating for the country's games sector.

Many of the developers behind breakout hits like last year's "Clair Obscur: Expedition 33" cut their teeth at the French giant.

"France's video games ecosystem owes a huge amount to Ubisoft," Michaud said.

"It would be very bad news if it couldn't manage".

Y.Keller--NZN