Ubisoft is reportedly on the cusp of closing select offices in Europe, as part of an overall ‘strategic reorganisation’ of the company’s major subsidiaries. While an officially announcement has not been made, a report on ResetEra has seemingly revealed an internal email indicating Ubisoft Benelux is to close on 1 April 2023. As many will note, this date aligns with April Fool’s Day – when false news announcements are rampant – but subsequent comments from Ubisoft imply truth to the report.
‘At this time, Ubisoft is facing several challenges due to external factors, such as the decline in sales volume of physical games in favour of digital sales, the centralisation of marketing by digitising all our communication channels, the shift from major retail releases to F2P, mobile and seasonal games and less major physical shows,’ Ubisoft reportedly told staff in the leaked email.
‘To meet the challenges of the future, Ubisoft’s management has decided to close a number of subsidiaries in Europe. Unfortunately, the Ubisoft Benelux entity is subject to the intended closure with most employees departing as of April 1st, 2023. Due to the closure, Ubisoft BV will fully outsource the current distribution of physical games in the Benelux to a distributor to be announced at a later stage.’
Read: Ubisoft cancels three new games, cites economic challenges
When asked about the content of this letter, Ubisoft did not refute the legitimacy of claims, instead telling NME: ‘Ubisoft’s publishing group is working on a strategic reorganisation of its European business subsidiaries. This process is ongoing and we don’t have any more detail to share at this stage.’
No further details were provided, although it’s likely we’ll learn more in the coming weeks. As the global economy continues to fluctuate, thanks to the impact of the coronavirus pandemic and Russia’s war against Ukraine, many game companies around the world are now reckoning with knock-on financial consequences.
Ubisoft reported as much in early 2023, with its latest financial reports indicating economic circumstances have contributed to a wave of relative failures in recent months. Mario + Rabbids Sparks of Hope and Just Dance 2023 Edition both fell significantly short of company sales goals, and the overall downturn has led to the cancellation of around seven major Ubisoft projects.
‘We are clearly disappointed by our recent performance,’ Yves Guillemot, Ubisoft CEO said of these developments. ‘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.’
Business closures are likely a response to these conditions, as Ubisoft attempts to claw back recent losses, and refocus its ambitions. So far, the ‘strategic reorganisation’ of the company’s subsidiaries is being kept under wraps, but given the process is ongoing, we can expect more official news shortly. Whatever the case, it does appear the company is now reckoning with a need for major change.
