Ubisoft announces a major organizational, operational and portfolio reset to reclaim creative leadership and restore sustainable growth

Core Insights - Ubisoft is undergoing a significant organizational, operational, and portfolio reset aimed at reclaiming creative leadership and achieving sustainable growth [2][9] - The reset is driven by the challenges in the AAA market, including rising development costs and increased competition, necessitating a shift in how the company operates [2][5] - The new strategy focuses on a gamer-centric organization structured around five Creative Houses, enhancing decision-making speed and adaptability to player expectations [3][10] Organizational Changes - The new operating model will consist of five Creative Houses, each responsible for specific genres and brands, combining production and publishing functions [10][13] - Each Creative House will have dedicated leadership teams with full financial ownership and accountability for brand development and economic performance [17][19] - The organization will be rightsized to improve structural efficiency, with cost reduction initiatives targeting at least €100 million in fixed cost savings by March 2026 [24][25] Portfolio Refocus - Ubisoft is revising its three-year roadmap, leading to the discontinuation of several projects and the allocation of additional development time to ensure quality [7][26] - The company has discontinued six games that do not meet the new quality standards, including the remake of Prince of Persia: The Sands of Time [26] - The refocused portfolio aims to enhance the quality of Open World Adventures and GaaS-native experiences, with a new project, March of Giants, currently in development [20][22] Financial Outlook - The reset will impact Ubisoft's short-term financial trajectory, with net bookings expected to be around €1.5 billion, reflecting a gross margin reduction of approximately €330 million [27] - Non-IFRS EBIT is projected to be around -€1 billion, influenced by the updated net bookings assumptions and transformation-related decisions [27] - The company anticipates a free cash flow of between -€400 million and -€500 million, with net debt expected to be between €150 million and €250 million by year-end FY26 [28]