Ubisoft Announces Major Restructuring and Updates Goals

• Ubisoft now forecasts 2026 net bookings of around 1.5 billion euros and an operating loss of roughly 1 billion euros, down from previous expectations of 1.9 billion euros in bookings and break-even operations
• The restructuring creates five 'Creative Houses' with separate management and budgets, including Vantage Studios (backed by 1.16 billion euro Tencent investment) managing major franchises like 'Assassin's Creed'
• Game cancellations and delays will result in a 650 million euro hit, while the company targets an additional 200 million euros in cost savings over two years beyond the 100 million euro program completing in March

Summary

Company: Ubisoft Entertainment (French video game publisher)

Key Announcement: Major restructuring into five creative divisions, effective early April, alongside significant financial outlook revisions.

Restructuring Details:

Ubisoft will reorganize into five "Creative Houses," each managing specific game genres with independent budgets and management teams. Vantage Studios, backed by a €1.16 billion investment from Tencent, will oversee major franchises including "Assassin's Creed." The remaining four units will focus on multiplayer shooters, live services, narrative-driven games, and casual/family games. Management compensation will be tied to player engagement and value creation metrics.

Portfolio Changes:

• Six games cancelled, including a "Prince of Persia" remake and three unannounced titles
• Seven additional projects delayed

Revised Financial Targets (2026):

• Net bookings: ~€1.5 billion (down from €1.9 billion)
• Operating loss: ~€1 billion (previously expected to break even)
• Impairment from cancellations/delays: €650 million
• Net debt: €150-250 million
• Cash reserves: €1.25-1.35 billion
• Free cash flow: negative €400-500 million

Cost Reduction:

• Current €100 million savings program to complete by March (one year behind schedule)
• New target: Additional €200 million savings over next two years
• Company considering potential asset sales
• Prior fiscal 2026-27 guidance withdrawn; new medium-term projections expected May 2026

Market Implications: The restructuring signals significant operational challenges, with substantial financial deterioration expected and aggressive cost-cutting measures planned to stabilize the business.