Ubisoft Shares Plunge 34%, Hitting 15-Year Low After "Reset"

I witnessed a significant drop in Ubisoft's share price this week, a direct consequence of the company's announcement of a major "reset." The publisher's decision to close two studios and cancel six games, including the long-awaited Prince of Persia: The Sands of Time remake, sent shockwaves through the market. The stock, already on a downward trend since the pandemic, plummeted a staggering 34% the day after the announcement, closing at a meager €4.06. This marks the lowest share price for the company since 2011, a year when it reported substantial financial losses.

Just a week prior, the shares were trading at €6.89, highlighting the severity of the market's reaction to the news. The restructuring and game cancellations have led Ubisoft to revise its financial forecast for the year, now anticipating net bookings of around €1.5 billion, a reduction of €330 million from previous projections. The company also expects to report an operating loss of approximately €1 billion for the financial year ending in 2026.

According to CNBC, the day after the announcement, the company's share price dropped by around 34%. This steep decline reflects investor concerns over the company's direction and its ability to navigate an increasingly competitive market. The "major organisational, operational and portfolio reset" is a response to what Ubisoft describes as a "persistently more selective AAA market and an increasingly competitive shooter landscape." This move aims to refocus the company's efforts and resources on its biggest properties and most promising projects. As part of this, the publisher will now organize its efforts across five "creative houses," each with a specific focus. These include scaling major franchises like Assassin's Creed and Far Cry, developing competitive shooter experiences, managing live service games, creating immersive fantasy worlds, and producing casual and family-friendly titles.

The restructuring has also led to the delay of seven unspecified games, a move intended to "ensure enhanced quality benchmarks are fully met" and "maximise long-term value creation." While not officially confirmed, it is widely believed that the much-rumored Assassin’s Creed Black Flag Resynced is among the delayed titles. This has fueled further speculation and concern among fans and investors alike. The cancellations and delays are part of a broader cost-cutting effort that aims to save the company €500 million and bring fixed costs down to €1.25 billion by March 2028. This compares to the €1.75 billion in fixed costs for the financial year ending 2023. The closures of studios in Halifax, Nova Scotia, and Stockholm, along with restructurings in other locations, are also part of this cost-saving initiative. The news has not been without its internal repercussions, as the French game industry union Solidaires Informatique has called for a strike in response to what it calls a "disastrous" announcement.

The cancellation of six projects, most notably the remake of Prince of Persia: The Sands of Time, has been a significant blow to fans of the Prince of Persia franchise. This, coupled with the news that the Watch Dogs franchise is reportedly dead, has left many wondering about the future of some of Ubisoft's most beloved series. While the company has stated that this reset will strengthen the group and enable it to renew with sustainable growth, the immediate impact has been a significant loss of confidence from both investors and the gaming community.

"Today’s market environment requires that the Group step-changes how it is organized and operates,” announced Yves Guillemot, founder and CEO of Ubisoft.

“The portfolio refocus will have a significant impact on the Group’s short-term financial trajectory, particularly in fiscal years 2026 and 2027, but this reset will strengthen the Group and enable it to renew with sustainable growth and robust cash generation.”