Ubisoft's latest financial update paints a portrait of a company in crisis
Blaming under-marketed games for low sales is all too common.
Strategy games had a big year in 2022. But in a crowded field of titles (mostly from Square Enix) the standout game was Mario + Rabbids Sparks of Hope, the continuation of Ubisoft’s unexpected hit series that began with Kingdom Battle. Despite rave reviews, the game has underperformed in the eyes of its publisher, contributing to a less-than-stellar quarter for Ubisoft. Even with claims that this is due to low sales, Ubisoft’s current predicament is partly caused by the lack of marketing for games like Sparks of Hope and speaks to a worrying trend in the industry.
Low sales, low spirits — In a financial update released January 11, Ubisoft said it was “facing major challenges” in part due to the underperformance games like Mario + Rabbids Sparks of Hope and Just Dance 2023.
“We are clearly disappointed by our recent performance,” wrote Ubisoft CEO Yves Guillemot.
The original Mario + Rabbids game, Kingdom Battle, was a surprise success for the company that reached 10 million players by 2022. The sequel, Sparks of Hope, reinvented the series in a bold way that received acclaim from critics. But according to Ubisoft, the game still did not attract the volume of sales the company was hoping for.
One reason for lesser sales could be that the marketing for the game did not build sufficient attention and hype for the intended audience. While fans of the original likely were anticipating Sparks of Hope’s release, newcomers to the franchise may not have known the game was nearing release. Even in games journalism spaces, I know people who were shocked to discover the game was released, due to the lack of marketing.
Despite being one of the most well-received Ubisoft games to release in 2022, the less-than-expected sales are enough to put the series in jeopardy. According to Ubisoft, they blame these low sales and larger financial troubles on the industry’s continued “shift towards mega-brands and everlasting live games”.
This reasoning is questionable, considering a large part of Ubisoft’s developmental efforts are already focused on those exact types of games.
Taking the blame — In the 2010s the open-world action game filled with endless objectives littering the map became the ubiquitous genre in the medium. A common way to refer to these types of games was to describe them as Ubisoft-style games.
Assassin’s Creed and Far Cry both defined this style of game. While offerings like Rainbow Six Siege and Ghost Recon Wildlands attempted to fill the void of live-service games. But in recent years Ubisoft’s roster has been criticized as being repetitive and boring, with sales declining and franchises like Assassin’s Creed scrambling to change their identity to stay relevant.
In the same financial report, Ubisoft confirmed that it canceled three unannounced games, on top of four other projects previously canceled in the past six months. One canceled project was a rumored VR Splinter Cell game. In tandem with yet another delay of for pirate game Skull and Bones, it paints a picture of a Ubisoft struggling to stay relevant.
A point of comparison is the recent strategy from Square Enix. In 2022, the company released more games than any other publisher, with most of them receiving little marketing and going mostly unnoticed by the public. Just like Ubisoft’s new claims of industry-wide change, Square Enix has a history of failing to promote games and then criticizing the studios when those titles “underperform.” This, in part, led to the sale of their western studios in mid-2022.
The biggest trend in the industry over the past year has been a push toward more mergers and acquisitions. Most notable is Microsoft’s current attempt to acquire Activision Blizzard. There are ongoing rumors that both Square Enix and Ubisoft are hoping to be acquired by larger companies. Even Square Enix’s iconic Final Fantasy franchise has been suffering, and both Square Enix and Ubisoft have prioritized a development style of following industry trends, including questionable endeavors like NFTs and blockchain.
Ubisoft’s struggles in the recent quarter involve cancellations, delays, and low sales that they blame on industry trends the company itself is chasing after. While the more creative projects like Mario + Rabbids are given the blame and may suffer the most, Ubisoft is left struggling due to indecision.