Avast! Skull and Bones will no longer make port in March as the good ship Ubisoft has found itself in stormy financial waters.
Three unannounced Ubisoft titles have also been made to walk the plank of the good ship by Captain Yves Guillemot lest the good ship is pulled under and consumed by mighty leviathans like Amazon and Sony. Yarr!
OK, that’s enough of that. Ubisoft said that it decided to delay the release of Skull and Bones (for a sixth time) and cancel three unannounced games after both Mario + Rabbids Sparks of Hope and Just Dance 2023 failed to meet sales expectations.
In a press release, the French company revealed that it's in the process of a major restructuring and is outlining a new strategy for the remainder of its fiscal year. As a result, Ubisoft is lowering financial expectations for the last quarter as a result of the company facing “major challenges.”
Ubisoft co-founder and CEO, Yves Guillemot, said: “We are clearly disappointed by our recent performance. We are facing contrasted market dynamics as the industry continues to shift towards mega-brands and everlasting live games, in the context of worsening economic conditions affecting consumer spending.
“Despite excellent ratings and players’ reception as well as an ambitious marketing plan, we were surprised by Mario + Rabbids: Sparks of Hope underperformance in the final weeks of 2022 and early January. Just Dance 2023 underperformed as well.
“Therefore, with the approval of the Board of Directors, we are taking additional important strategic and operational decisions today. It is key to continue adapting our organization, to further strengthen our execution and to ensure we both deliver amazing games to players as well as great value creation”
The company is also cutting €500million (£444m / $540m / AU$777m) of research and development funding on their upcoming titles and has said it is going to instead focus on fewer games going forward, as it restructures the company and reduces costs.
The Leviathan Wakes
Whenever a ship – or in this case a publicly traded company – begins to find itself in a spot of bother there are bound to be all manner of large aquatic animals looking for a cheap meal.
The same is certainly true of Ubisoft, who may as well have been ringing the metaphorical dinner bell for a hungry hedge fund or multi-national tech firm that wants to wrap its huge tentacles around the company and drag it back to its lair.
Last April, following a rough couple of years for the company that included failed bets on NFTs and cryptocurrency and widespread allegations of sexual misconduct at the company (via GamesIndustry.biz), Bloomberg reported that Ubisoft was open to a buyout and that several private equity firms including Blackstone Inc and KKR &Co. were interested. Although the publisher said it had not entered into any serious talks at the time.
If you consider what usually happens when equity firms get the teeth into an entertainment company, this could have merely been a ploy by the French publisher to drum up interest from a buyer that won't pick its bones clean like a shoal of angry piranha and then sell the resultant chum to the highest bidder.
So who would that be? In my mind, there are two potential buyers for Ubisoft and that is Amazon or Sony.
Both have close relationships with the publisher and have partnered with the company to offer Ubisoft+ as part of their own game subscription services. Also Ubisoft, unlike most other developers, is continuing to develop games for Amazon’s cloud gaming service Amazon Luna.
But why would either want the company? From Sony’s perspective, buying Ubisoft would give the leverage it needs to ensure that Call of Duty never leaves the PS5 (and PS4). More importantly, though, it would provide Sony with the Tom Clancy brand it could use to build its biggest rival if it ever did. Yes, I know it could anyway, but stay with me.
On top of this Sony, which appears to be trying to create more synergy between its entertainment divisions, could also easily leverage Ubisoft IP for TV and movie adaptations.
Meanwhile, Amazon could use such an acquisition to go from a relatively small player in the sector to a huge one. With Bezos' unfathomably deep pockets, it would have no problem taking all that juicy IP and turning the likes of Assassin's Creed, Rainbow Six and Rayman into mega franchises that cross games, TV and Films.
But that’s just an old sailor's tale.
