, Ubisoft reported a steep 21.9% year-over-year decline in net bookings, which totaled €642.3 million ($683 million). While cost-cutting initiatives aimed at stabilizing the business are underway, challenges in core revenue drivers and rising debt present an uphill battle.
Ubisoft’s recent releases have fallen short of market expectations, adding to the company’s financial woes. XDefiant, Ubisoft’s high-profile first-person shooter genre, initially showed promise, setting company records with one million unique players in its first 2.5 hours and surpassing eight million players in its debut week. However, by August, player engagement had waned significantly, with concurrent players struggling to reach 20,000 across platforms, .
“XDefiant was behind expectations, and the team is working on improving hit registration and net code. Our game and service strategy remains a core pillar, with plans to expand Rainbow Six Siege and introduce Rainbow Six Mobile. We are reviewing strategic options to improve execution and deliver sustainable cash flows, but no further comments on strategy changes at this time.,” said CEO Yves Guillemot.
Adding to the setbacks, Star Wars Outlaws also underperformed, despite .
The downturn in new game performance has intensified Ubisoft’s reliance on its legacy titles, a strategy that has yielded some positive results. Back-catalog games such as Rainbow Six Siege and the Assassin’s Creed series exhibited solid engagement, with back-catalog net bookings rising by 12% year-over-year. Player activity metrics were strong, with a 9% increase in playtime and a 6% rise in session days across Ubisoft’s legacy franchises. Digital net bookings also grew 12% year-over-year, reflecting sustained demand for Ubisoft’s established brands in the absence of substantial new game success. Over the past decade, the Assassin’s Creed series alone has generated approximately €4 billion, while Rainbow Six Siege has brought in €3.5 billion in consumer spending, underlining the enduring profitability of these titles.
Despite these successes, the company’s bottom line remains pressured. Ubisoft reported a net loss of €246.7 million ($262 million) in the first half of fiscal 2024-25, a sharp increase from a €34.3 million ($36.4 million) loss in the prior year. Free cash flow saw improvement, ending at -€126 million (-$134 million), a recovery from -€284 million (-$302 million) last year due to stricter working capital management. Ubisoft has also streamlined its workforce, reducing headcount to 18,666 by September 2024—a cut of more than 2,000 employees over the past two years.
Ubisoft’s cash reserves have dwindled as well, with cash and equivalents down to €933.1 million ($980 million) as of September 30, from €1.3 billion (~$1.38 billion) a year earlier. At the same time, the company’s non-IFRS net debt has climbed to €1.1 billion (~$1.17 billion), further straining its financial flexibility in an already challenging high-debt environment.
Looking ahead, Ubisoft projects third-quarter net bookings to reach approximately €380 million (~$405 million), a 39% increase year-over-year, and estimates fourth-quarter net bookings to rise slightly to around €900 million (~$959 million). To strengthen its position, Ubisoft will focus on core segments such as “Open World Adventures” and “Games as a Service” (GAAS) while scaling back non-core assets to bolster financial flexibility.
Guillemot addressed shareholders, saying, “We are deeply transforming Ubisoft to recapture the creativity and innovation that fueled our success, while improving execution and predictability. Adopting a player-centric approach is key. For instance, we’re refining Star Wars Outlaws based on player feedback, preparing for its Steam launch, the first story pack, and the holiday season.”
The company is also taking additional time to polish its next ambitious title in the Assassin’s Creed series, Assassin’s Creed Shadows, which Guillemot promises will deliver a “highly polished, exceptional experience on day one.”
Ubisoft CFO Frédérick Duguet added that Ubisoft is exploring non-core asset sales. “As part of our strategy to focus on Open World Adventures and GAAS-native experiences, we’re evaluating the sale of non-core assets to increase financial flexibility,” Duguet said.
In recent weeks, Bloomberg News that Tencent Holdings and Ubisoft’s founding Guillemot family are considering strategic options for the company’s portfolio, including a possible buyout of the Assassin’s Creed franchise.
