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Ubisoft wants to extract more cash from €120 billion live service market

'The objective is to expand our footprint in this dynamic market.'

Chris Kerr, News Editor

May 16, 2024

3 Min Read
Key artwork for XDefiant
Image via Ubisoft

French publisher Ubisoft has shared its latest fiscal report, and there are some interesting musings buried within.

The company delivered record net bookings of €2.3 billion during FY24 and confirmed it has reduced its headcount by 1,700 since September 2022 as part of a cost reduction program.

It has also "sharpened" its strategic focus around two core verticals: open world adventure projects like Assassin's Creed and The Division and 'GaaS-native experiences' (live service titles) such as xDefiant and Rainbow Six Siege.

Ubisoft's big bets: Open worlds and live service games

Notably, the company claims those two markets are worth €25 billion and €120 billion, respectively, providing some insight as why Ubisoft feels they'll be key to turning around its fortunes.

It might seem odd to say that about a company that just achieved record net bookings, but this time last year Ubisoft was staring down a €500 million operating loss. Ubisoft CEO Yves Guillemot said the company's latest earnings show it's now back on a "profitable growth trajectory," and suggested the dual focus on open world projects and live service experiences will allow it to implement a "more balanced and recurring business model, supported by multiple revenue steams."

"Pursuing a pragmatic and selective organic investment approach, and in line with the strategic pillars announced last year, our strategic focus is on returning to leadership in the Open World Adventure segment and expanding our footprint in GaaS-native experiences," added Guillemot in a press release.

"With these core verticals, and leveraging ongoing investments in our technologies to reach and maintain a competitive advantage, we aim to drive growth and recurrence with the objective to gradually expand operating income and generate robust free cash flow."

A slide from Ubisoft's investor presentation that outlines its live service ambitions

Ubisoft believes it will also have opportunities to "leverage and better cross-fertilize" established brands as part of its new approach, but noted its first order of business is to "return to leadership in the open world adventure segment" with the launch of Star Wars Outlaws and Assassin's Creed Shadows.

"The second objective is to expand our footprint on GaaS-native experiences. Historically one of the major segments in the video game industry, it currently represents €120 billion, is a growing market and has the largest total addressable market in terms of number of players," it added.

"In this segment, Ubisoft has notably successfully installed Rainbow Six Siege, which became one of our largest and most profitable games. The objective is to expand our footprint in this dynamic market notably thanks to growing existing experiences as well as the upcoming releases of XDefiant, Rainbow Six Mobile and The Division Resurgence."

Live service titles have proved incredibly lucrative for some companies such as EA Sports FC publisher EA, but others like Suicide Squad: Kill the Justice League publisher Warner Bros. Games have failed to reap the rewards. Developers also seem wary of the business model and have questioned its long-term viability in multiple surveys published this year.

About the Author(s)

Chris Kerr

News Editor, GameDeveloper.com

Game Developer news editor Chris Kerr is an award-winning journalist and reporter with over a decade of experience in the game industry. His byline has appeared in notable print and digital publications including Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. Throughout his career, Chris has covered major industry events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton. He has featured on the judging panel at The Develop Star Awards on multiple occasions and appeared on BBC Radio 5 Live to discuss breaking news.

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