Ubisoft Confirms Studio Closures and Game Cancellations Despite Strong Q3 Outlook

Ubisoft dropped a bombshell on 21st January. Six games cancelled. Two studios shut down. A billion-euro loss expected.

The French publisher confirmed the long-awaited Prince of Persia: The Sands of Time remake has been axed after years of delays. Joining it on the chopping block are four unannounced new intellectual properties and one mobile game.

The Halifax and Stockholm studios are being closed entirely. Further restructuring is planned for Abu Dhabi and RedLynx locations, though Ubisoft has not disclosed exact headcount numbers.

Money Troubles Despite Recent Success

Here's where things get weird. Ubisoft reported €330 million in sales for their most recent quarter, driven by partnerships and strong back-catalogue performance. The Assassin's Creed franchise exceeded expectations, whilst The Division 2 had already surpassed its previous year's annual bookings in just six months.

Yet the company expects an operating loss of around €1 billion for fiscal year 2025-2026. An accelerated impairment charge of €650 million relates directly to the cancelled projects. Net bookings projections dropped by €330 million to €1.5 billion for the year.

Ubisoft's stock crashed more than 10% following the announcement.

Five Creative Houses Replace Old Structure

The restructuring divides operations into five specialised "Creative Houses". Each unit focuses on distinct genres and franchises.

Vantage Studios, established in 2025 with Tencent backing, handles Assassin's Creed, Far Cry, and Rainbow Six. The goal? Transform them into "annual billion-dollar brands".

Four other Creative Houses oversee competitive shooters (The Division, Ghost Recon, Splinter Cell), live experiences (For Honor, The Crew, Riders Republic, Brawlhalla, Skull & Bones), immersive fantasy universes, and casual games.

CEO Yves Guillemot framed the move as necessary for long-term sustainability. The company aims to cut €200 million in costs over two years, adding to reductions that already eliminated over 3,000 jobs.

Seven Games Delayed to 2027

Alongside the cancellations, seven titles received additional development time to "ensure enhanced quality benchmarks are fully met". Ubisoft has not named all delayed games, but industry observers expect the Assassin's Creed IV: Black Flag remake among them.

One unannounced title initially planned for fiscal 2026 now targets fiscal 2027 (between April 2026 and March 2027).

Beyond Good & Evil 2 remains in active development under Creative House 4, according to reports.

High-Profile Departures Add to Turmoil

Julian Gerighty left Ubisoft just days before the restructuring announcement. The Division executive producer spent 27 years at the company before joining EA's Battlefield Studios. He departed only a week after promoting The Division 3 at the New Game+ Showcase, calling it "a monster" in development.

Massive Entertainment insists Division 3 development continues unchanged with remaining team members.

The exit mirrors Marc-Alexis Côté's departure in October 2025. The former Assassin's Creed franchise head left seven months after Shadows launched. Côté is now suing Ubisoft for nearly $1 million, claiming "constructive dismissal" after being offered a demotion following Vantage Studios' creation.

Both departures highlight tension as Ubisoft consolidates creative leadership under fewer people.

Return to Office Mandate

All teams must return to a five-days-per-week in-office schedule, with annual allowances for remote work days. The move reverses flexible arrangements established during the pandemic.

The policy sparked internal debate, particularly at studios facing restructuring.

What's Next for Ubisoft

Full earnings results arrive on 12th February. More workforce reduction details are expected then.

Q3 net bookings are projected at €305 million, a slight year-over-year increase. Q4 should see several new releases and continued partnership contributions, though at lower levels than last year.

The company expects to return to positive operating income and free cash flow in fiscal 2027. Major content releases from flagship brands are planned for fiscal 2027 and 2028.

Four new intellectual properties remain in development, including "March of Giants", recently acquired from Amazon. Ubisoft will announce which Creative Houses handle these projects later.

The restructuring marks what Guillemot calls "a decisive turning point for Ubisoft". Whether the gamble pays off depends on executing a tighter, more focused portfolio whilst retaining talent and player trust.

For now, Prince of Persia fans will have to wait longer for the remake they've been promised since 2020. If they get it at all.