Ubisoft recently announced the closure of its Call of Duty competitor, XDefiant, along with the shutdown of Ubisoft San Francisco and the layoff of nearly 300 employees. This marks another challenging development for the video game industry. Internal memos from CEO Yves Guillemot and chief studios boss Marie-Sophie de Waubert have surfaced, revealing the difficult decisions behind these moves.
In a memo obtained by Insider Gaming, Guillemot expressed that canceling XDefiant, closing Ubisoft San Francisco and Osaka, and scaling down its Sydney office were among the toughest decisions the company has had to make. He commended the XDefiant development team for their ambition to compete with the best shooters on the market but acknowledged that it wasn't enough. Guillemot also expressed his deepest gratitude to those being laid off and promised to assist them as much as possible.
Guillemot mentioned that Ubisoft is navigating through turbulent times and is working with his executive team to find the best solutions to maintain control of their destiny. This statement comes amid speculation that Ubisoft might be a potential acquisition target due to its declining stock value earlier this year. Reports in October suggested that Ubisoft was in talks with Tencent about various options, including going private or being acquired by Tencent, though no concrete actions have been taken yet.
In her memo, Marie-Sophie de Waubert explained that XDefiant had an encouraging start but failed to attract and retain enough players. She announced that the game would be sunset due to its inability to meet the required results for further significant investment. Despite this setback, de Waubert emphasized that games-as-a-service remains a strategic pillar for Ubisoft, citing successes like Rainbow Six, The Crew, and For Honor.
XDefiant was developed by Ubisoft San Francisco, and about half of the developers are transitioning to other projects within Ubisoft. The game, produced by Call of Duty veteran Mark Rubin, launched in May and initially attracted many players. However, the momentum could not be sustained. Rubin had previously denied rumors of the game's shutdown after Season 4, stating he was already planning content for the game's second year.
De Waubert also hinted at larger structural changes coming to Ubisoft in the areas of production and business practices. Guillemot, in his memo, mentioned that Ubisoft will aim to reduce unnecessary processes to allow its workers to focus more on game development. These layoffs follow a previously announced cost-cutting program that resulted in over 1,000 layoffs at the company.
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