UBIsoft in potential financial trouble

S

Silent_Buddha

Legend
www.axios.com

Ubisoft cancels three more games, issues dire update

Company now expects $1 billion less in operating income for the year
www.axios.com www.axios.com

Basically more evidence of how difficult it is to successfully fund, develop and sell AAA games in the modern day. If anything at all goes badly (economy, AAA game selling badly, AAA game getting delayed, etc.) it can start a downward slide that may not be recoverable for a non-platform holding AAA publisher.

It's possible that UBIsoft will potentially be more desperately seeking a buyer sometime in the next few years.

Regards,
SB
 
It is very difficult for companies to keep funding these larger and more expensive games. I only see it getting worse as time goes on. I however think there will be a lot of growth at the lower end of the developer spectrum. You can turn out pretty nice looking games at smaller budgets now thanks to improving tools and hit more platforms at the same time. We may only see a few large developers putting out AAA content along with platform holders and everyone else putting out smaller games
 
fehu said:
They need managers, not money.
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From the outside, the project management of movies seems to be extremely good. Then again is very formulaic, but still its a creative art that needs to be delivered on time. Games, most likely even more complex, but seems to not have the similar super tight project management.
I wonder if games would be more profitable if the the project management was better, if it even is possible to be better. But standing on the outside it looks like that is a key issue....
 
Games are more problematic than movies just due to the way each are created.

Troubleshooting bugs and fixing errors in rendering can be extremely time consuming. Unlike say, reshooting a scene in a movie if an actor flubs their line. One is immediately apparent to the director and they can continue reshooting until it is correct. The other will first need to be found before it can be fixed. And if that bug doesn't pop up until QA on the "gold" build, then it can be incredibly hard and time consumer to fix. So, if it's not a game breaking bug you can ship it and fix it later. However, if it's a progression stopping bug that happens only if X thing is done and doesn't show up until 4-5 hours after the event that triggers the bug, it can be an absolutely massive undertaking tracking that down and you can't ship the game until it's fixed.

Filming a movie is far simpler than creating a AAA game even if the budgets may be similar. Which means it's also far easier to remain on schedule.

Regards,
SB
 
Silent_Buddha said:
www.axios.com

Ubisoft cancels three more games, issues dire update

Company now expects $1 billion less in operating income for the year
www.axios.com www.axios.com

Basically more evidence of how difficult it is to successfully fund, develop and sell AAA games in the modern day. If anything at all goes badly (economy, AAA game selling badly, AAA game getting delayed, etc.) it can start a downward slide that may not be recoverable for a non-platform holding AAA publisher.

It's possible that UBIsoft will potentially be more desperately seeking a buyer sometime in the next few years.

Regards,
SB
Click to expand...
https://twitter.com/x/status/1613247882366181413
 
iroboto said:
https://twitter.com/x/status/1613247882366181413
Click to expand...

Hence, why I mentioned they'll get increasingly more desperate to find a buyer. That desperation will likely evidence itself in either selling off of isolated IPs, blocks of IPs, or a vast reduction in the asking price for UBIsoft.

Along the way we're likely to see development house closures, restructuring and general laying off of staff (both managerial, sales, QA, support, and developerment).

Keep in mind this isn't just isolated to UBIsoft. Bethesda and ABK were also staring down this AAA gun barrel. They were just lucky to get out while their assets (IP and development houses) were/are still valuable.

It's also something that Square-Enix has been trying to deal with for over a decade now and are still attempting to deal with to remain in business. Same goes for Konami which is why they jettisoned a lot of development staff and doubled down on their more profitable divisions (like Pachinko/Pachislot).

Regards,
SB
 
Silent_Buddha said:
Games are more problematic than movies just due to the way each are created.

Troubleshooting bugs and fixing errors in rendering can be extremely time consuming. Unlike say, reshooting a scene in a movie if an actor flubs their line. One is immediately apparent to the director and they can continue reshooting until it is correct. The other will first need to be found before it can be fixed. And if that bug doesn't pop up until QA on the "gold" build, then it can be incredibly hard and time consumer to fix. So, if it's not a game breaking bug you can ship it and fix it later. However, if it's a progression stopping bug that happens only if X thing is done and doesn't show up until 4-5 hours after the event that triggers the bug, it can be an absolutely massive undertaking tracking that down and you can't ship the game until it's fixed.

Filming a movie is far simpler than creating a AAA game even if the budgets may be similar. Which means it's also far easier to remain on schedule.

Regards,
SB
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Yes a movie is typically 2-3 hours where the director fully has control and directs the experience for a passive audience.
A game might have 4 hours of just cutscenes and sometimes considerably more. And then you have the gameplay where the player has interaction and some control of that experience itself which may last tenths of hours on top of the cut scenes.
Games are considerably more complex.
 
The one that makes games go well over their due date is when they respin a game after having spent significant time producing it post pre-production.
Basically they find out the game is no fun, or it's not going to work. And there is no reversible process but to scrap and begin entirely anew.

I've heard that this is the most painful thing for developers, on the other hand, you have studios that really have a strong grasp of making a vision a reality (Insomniac) and they don't need long to push out a game.
 
Sounds like they bet the farm on the latest iterations and their projections were a bit overoptimistic.

I don't understand how they've been able to sell all those Far Crys, Watch Dogs, and Assassin's Creeds. But they certainly found an audience who at least thinks they enjoy the formula. Or maybe it's just the continuous supply of new gamers.
 
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Nesh said:
Games are considerably more complex.
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So is building an oil platform or a space station or a plane etc.
But is project management a key issue? I am not in the know, so I do not know, that is why I asked the question :)
Now, if project management is not an issue, what things can/should be done to get it to be "produced" as well as a movie.

From where I stand, a movie is also complex, we agree not as complex as a game. But relative to each other are movies closer to a perfect production cycle than a game. Of course movies have been around for over 100 years, so they do have some head start :)
 
Silent_Buddha said:
Hence, why I mentioned they'll get increasingly more desperate to find a buyer. That desperation will likely evidence itself in either selling off of isolated IPs, blocks of IPs, or a vast reduction in the asking price for UBIsoft.
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Embracer group to the "rescue" then....

My curiosity about them is super peaked now, are they producing hits with better profits due to better cost control? It looks the founder really has "nose" for running things more efficient/better or something.
Does it hold up with these large IP buyouts??
 
The most likely buyer of Ubisoft is unfortunately Tencent, who already own a significant portion of the major shareholders.
 
cheapchips said:
I've enjoyed all the 'rpg' AC's. Fairly relaxing games with great historical tourism.
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That's a good point. I bought AC Syndicate because it gave me some Thief / Dishonored vibes and the industrial revolution aspect is interesting and highly detailed. But I find Ubisoft open world gameplay so meh. I have some of the older ones too. 1, 2 and 4 I think. Just ran around a bit in each.
 
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Malo said:
The most likely buyer of Ubisoft is unfortunately Tencent, who already own a significant portion of the major shareholders.
Click to expand...
You make it sound like it's a bad outcome but compared to console vendors, they'd at least be a decent custodian of Ubisoft property compared to being under the whims of platform politics. Short of being acquired by another big publisher, being under the ownership of Tencent would be one of the more ideal cases since Ubisoft would be able to more easily pivot into live service games with Tencent's expertise in that segment and they'd still be able to do multiplatform releases unencumbered as before all the while shareholder's get to cash out. Nearly everybody wins out under that scenario ...
 
Tencent if I recall correctly has actually less than 10% of Ubisoft, it's significant but far from being a step away from controlling it.
 
fehu said:
Tencent if I recall correctly has actually less than 10% of Ubisoft, it's significant but far from being a step away from controlling it.
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I thought they owned more shares but had less voting right shares, or something to that effect of different share types. There were multiple percentages reported like who owns what.

I can't recall specifics either, time for some searching... So 11% of Ubi, where it's 49.9% of 15% of Ubi with 5% voting rights. Yeah, lots of %ages.


www.reuters.com

Ubisoft shares tumble as Tencent deal seen dampening buyout prospects

Shares in Ubisoft Entertainment tumbled on Wednesday after it announced a deal that sees China's Tencent Holdings raise its stake in the company, a move which analysts say dampens the prospect of a full sale of the French game maker.
www.reuters.com www.reuters.com

It makes Tencent Ubisoft's single biggest shareholder with an overall stake of 11%, which can be further increased to as much as 17%.

The transaction makes Tencent part of a shareholder pact with the Guillemot family. The deal involves Tencent's acquisition of 49.9% of Guillemot Brothers Limited - the holding company that owns the bulk of family's 15% stake in Ubisoft - with just 5% voting rights.
 
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