Ubisoft Restructures, Pre-Orders Fall 2.9% Amid Transition
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Aime SummaryUbisoft, a prominent French video game developer, announced a significant restructuring of its internal framework on Tuesday, transitioning to an autonomous "Creative Houses" model. This new model is designed to cater to specific game genres, fostering greater creativity and innovation within the company. Each Creative House will operate independently, focusing on its respective game types, which is expected to enhance the quality and diversity of Ubisoft's game offerings and potentially attract a broader audience.
The restructuring comes alongside the announcement that Ubisoft's net pre-orders for the first quarter fell short of expectations. During a conference call, the company attributed this shortfall to the transition period associated with the new model. Each Creative House will be led by a team selected based on their expertise in specific game genres, ensuring that each studio can leverage its strengths to produce high-quality games. This approach is designed to streamline operations and improve efficiency, ultimately benefiting both the company and its customers.
The first Creative House, a joint venture with a Chinese technology company, will oversee the management of flagship series such as "Assassin's Creed," "Far Cry," and "Tom Clancy's Rainbow Six." The leadership of this studio will be shared by two individuals, who will oversee the development of cross-platform brands. The company aims to complete all organizational adjustments by the end of this year.
Ubisoft reported a net pre-order volume of 281.6 million euros for the first quarter, falling short of the targeted 310 million euros and marking a 2.9% decrease from the same period last year. The company attributed this shortfall to the underperformance of "Tom Clancy's Rainbow Six: Siege" and the delay of a collaborative project, which is now expected to progress in the second quarter. Despite the shortfall, Ubisoft reaffirmed its annual performance guidance and forecasted a net pre-order volume of approximately 450 million euros for the second quarter.
Upcoming releases include "Age of Empires IV: Rome's Peace," a remake of "Prince of Persia," and mobile games "Tom Clancy's Rainbow Six Mobile" and "Ghost Recon: Breakpoint." The restructuring and the subsequent drop in pre-orders highlight the challenges and opportunities that Ubisoft faces as it navigates the competitive video game industry. The new Creative Houses model represents a significant strategic shift, aiming to capitalize on the unique strengths of each studio while fostering a more innovative and agile corporate culture. However, the initial setback in pre-orders underscores the need for careful management and execution during this transitional phase.
The company's decision to restructure its internal framework reflects a broader trend in the gaming industry, where companies are increasingly focusing on specialized teams and innovative models to stay competitive. By adopting the Creative Houses model, Ubisoft aims to create a more dynamic and responsive organization, better equipped to meet the evolving demands of the market. This shift is expected to drive long-term growth and success for the company, despite the short-term challenges posed by the transition.
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