Ubisoft's Game Plan: Sweeping Reorganization Shakes Market

Ubisoft has announced a major reorganization, canceling six games and splitting operations into five divisions. Shares dropped significantly following the announcement, and studios in Halifax and Stockholm are closing. The restructuring aims to refocus efforts after years of weak performance and financial strain.

Ubisoft, the renowned French video game publisher known for franchises like 'Assassin's Creed' and 'Far Cry', has signaled a radical overhaul of its operations. The company, on Wednesday, revealed plans to cancel six games and restructure into five genre-based divisions, a move that triggered its stock to plummet to its lowest in more than a decade.

The restructuring arrives amid closures of studios in Halifax, Canada, and Stockholm, Sweden, reflecting years of delays and disappointing releases. This marks part of Ubisoft's strategy to control costs and revive investor confidence after perceived missteps and financial challenges, including a debt covenant breach disclosed last year.

Analysts have dubbed the overhaul as 'the big shake-up,' pointing to further financial pressures, especially with an upcoming bond maturity in 2027. Currently, Ubisoft's shares trade around 4.5 euros, valuing the company at approximately 616 million euros, a sharp fall from its peak valuation of 11 billion euros in 2018.

(With inputs from agencies.)