A screenshot from Assassin’s Creed Shadows (2024), Ubisoft

Ubisoft laid off approximately 45 employees ahead of the release of Star Wars Outlaws and Assassin’s Creed Shadows.

A screenshot from Star Wars Outlaws (2024), Ubisoft

An Ubisoft spokesman confirmed to Bloomberg that the “difficult yet necessary decision was made to align these studios’ organizations with their future business and development objectives.”

The layoffs reportedly hit the company’s offices in San Francisco and Cary, North Carolina.

A screenshot from Assassin’s Creed Shadows (2024), Ubisoft

The studio in Cary, North Carolina is Red Storm Entertainment, which was working on Tom Clancy’s The Division Heartland, but was scrapped by Ubisoft in May. The studio was originally founded by Clancy and British Royal Navy Captain Doug Littlejohns in 1996 and created Rainbow Six in 1998. It was acquired by Ubisoft in 2000. The studio has worked on Ghost Recon, Far Cry, The Division, Rocksmith, and Assassin’s Creed Nexus.

Ubisoft detailed in an earnings press release why they were scrapping The Division Heartland, “In line with the increased selectivity of its investments, Ubisoft has decided to stop development on The Division® Heartland and has redeployed resources to bigger opportunities such as XDefiant and Rainbow Six.”

According to the Ubisoft San Francisco website, the office houses both a development studio and a business office and has nearly 500 employees working there. The studio created South Park: The Fractured but Whole and is working on Rocksmith+ and XDefiant.

A screenshot from XDefiant (2023), Ubisoft

As noted above these layoffs come ahead of major releases for Ubisoft that the studio is counting on to make a big splash. However, the games might not be making as big a splash as Ubisoft and investors hope.

During a recent earnings call, Ubisoft’s CEO Yves Guillemot was asked by an investor from Bank of America if Ubisoft planned on delaying Star Wars Outlaws due to the negative feedback it was receiving regarding its NPC detection and graphics.

Guillemot responded, “The game has gone gold. So the date is well confirmed for August 13th. And, as you mentioned, we’ll be showcasing more content of a very high quality, multiple hours that will really show the depths of the open world, that is a key element of the promise to enjoy the exploration of the galaxy and with multiple planets. So that will bode well for the game in terms of high quality delivery.”

The company’s Chief Financial Officer (CFO) Frédérick Duguet also added, “We’ve said also for Star Wars the level of quality, the world, and the experience it’s really very high. We are really leveraging our engine and I think people will love it.”

A screenshot from Star Wars Outlaws (2024), Ubisoft

Barclays’ Nick Dempsey also questioned the sales estimates the company was projecting given the pending release of Star Wars Outlaws. He asked, “When I look at the guidance for Q2 and if I assume something similar for back catalog in Q2 as Q1 kind of getting to €200 to €230 million, that sort of range. For the new release Star Wars Outlaws, when I look at the $70 price and then assuming what you might get from it, I’m getting to around 5 million units, something in that sort of bracket. First of all, where could I be going wrong with that thinking? Secondly, are you just being pretty conservative in your guidance because I guess given the interest in that game we might have thought it would be more than 5 million units?”

Guillemot responded, “We can’t comment on the very numbers you are quoting. But what we have factored in is a strong launch for Star Wars Outlaws that reflects the fact that it is among the most awaited games of the industry this year and a really strong, positive community sentiment. And also, the fact, that we are coming with the biggest marketing campaign ever, so far, for [an] Ubisoft game. So that’s what we’ve been factoring in the second quarter.”

A screenshot from Star Wars Outlaws (2024), Ubisoft

Guillemot also addressed concerns surrounding Assassin’s Creed Shadows saying, “As we mentioned, we expect Shadows to be the most ambitious title of the series. We also anticipate that Star Wars, that is usually a very strong brand around Christmas, should do very well with the busy season with a strong impact also from [inaudible] content from both games. And also we expect further growth from Rainbow Six Siege as well as a strong impact of Shadows on the back catalog of Assassin’s Creed, plus the contribution of XDefiant.”

However, when Dempsey followed up asking if the game would be the best selling Assassin’s Creed game, Guillemot evaded the question saying, ““At this time we can say we expect [Assassin’s Creed] to be among the high sellers of the company so far.”

A screenshot from Assassin’s Creed Shadows (2024), Ubisoft

Ubisoft is in a very precarious position given they are laying off employees across their company as evidenced by these layoffs at both Red Storm and Ubisoft San Francisco. They’ve likely had two major flops in the last year with Skull and Bones and Avatar: Frontiers of Pandora and it’s quite possible that both Star Wars Outlaws and Assassin’s Creed Shadows will also struggle to be financially viable.

In fact, Ubisoft’s stock price, which currently sits at 16.89 is down nearly 27% for the year. In the past three months alone it’s down over 27%. In the last six months it’s down 31%. Over the past year it’s down almost 40%. In the past 5 years its down over 75%.

Ubisoft Entertainment SA stock price via Yahoo! Finance

Former World of Warcraft Team Lead Mark Kern informed gamers this is the time to take action and reminded them to boycott the upcoming games writing on X, “This is the time to make the most impact by not buying Assassin’s Creed Shadows or Star Wars Outlaws. 2 years to send a signal to AAA gaming. Gamers deserve better.”

 

What do you make of Ubisoft laying off employees at Red Storm Entertainment and Ubisoft San Francisco ahead of the releases of Assassin’s Creed Shadows and Star Wars Outlaws?