Ubisoft’s Cost-Cutting Crisis Could Put Its Biggest Games at Risk

Key Points:

• Ubisoft announced the closure of Red Storm Entertainment’s game development division, resulting in 105 layoffs as part of a global cost-reduction plan aimed at addressing operational and strategic priorities.
• The closure impacts several key projects, including the next mainline Ghost Recon game (codenamed OVR), which is considered crucial for Ubisoft’s upcoming fiscal year but has already been scaled back and faces potential further delays due to the loss of Red Storm staff.
• Despite the layoffs, some affected employees were asked to continue working during the 60-day WARN Act notice period, primarily on critical projects like OVR and a Watch Dogs Legion director’s cut, although their system access was initially revoked.
• Red Storm was involved in about 10 Ubisoft projects, including the over-budget Splinter Cell Remake, highlighting concerns that studio closures may harm project timelines and budgets, exacerbating existing issues rather than resolving them.
• Ubisoft plans additional cost-cutting measures totaling 100 million euros, suggesting more layoffs are likely, while insiders criticize the company's approach as lacking strategic foresight and potentially worsening its development challenges.