Ubisoft is closing down several European locations, including its Ubisoft Benelux office, citing "external factors" impacting the company's physical game sales. Layoffs have been occurring across the video game industry in recent months, with the current financial year coming to a close. Ubisoft hasn't been absent from this wave of cuts, and perhaps stands out as one of the most severely impacted companies. The newly confirmed closures are just the latest step Ubisoft has made as part of a series of cuts.
In mid-January, Ubisoft confirmed cost-cutting efforts as it moved toward a targeted restructuring. The most public of these cuts was the confirmation of three canceled game projects, on top of four cancelations from mid-2022. The oft-delayed Skull & Bones had also been pushed back once more. Ubisoft said at the time that developers on those projects would be shifted to other titles as applicable, but layoffs were later confirmed to be ongoing.
The latest effort in Ubisoft's plan to cut operating costs has resulted in the company shutting down multiple European locations. An internal email that was leaked publicly confirmed that Ubisoft management decided to "close a number of subsidiaries in Europe." These shutdowns include the Ubisoft Benelux office and the layoff of "most" of the location's employees starting April 1.
As explanation for the closure of Ubisoft Benelux and other European Ubisoft locations, the company referenced "several challenges due to external factors." Listed factors include falling physical game sales, digitizing communication channels, a shift toward free-to-play games over major retail releases, and both mobile and seasonal projects being prioritized over physical products. In other words, Ubisoft's moving more toward online experiences and online work is leading to less need for infrastructure to support physical products.
While it isn't entirely clear what each of the locations Ubisoft is closing down was responsible for, Ubisoft Benelux is implied to have handled the market of Belgium, Netherlands, and Luxembourg. That would include marketing and distribution. Ubisoft says that it's planning to outsource the distribution of physical games within the Benelux, with a distributor to be announced at a later date.
It's unlikely that this will be the last step in Ubisoft's continued efforts to reduce operating costs, but with the end of the fiscal year approaching it's unclear if cuts will continue past April. Ubisoft's shift toward online games has had serious consequences, particularly since many games haven't found an audience. If recent leaks are to be believed, it may be moving back toward more traditional AAA game releases, though. Here's hoping Ubisoft is able to find the stability necessary to prevent further cuts in 2023 and beyond.
Source: ResetEra