Net bookings fall 20.5% despite strong Assassin’s Creed release; new Tencent-backed subsidiary aims to unlock franchise value
Shares in French video game developer Ubisoft (EPA:UBI) sank more than 18% on Thursday after the company reported a 20.5% decline in net bookings for the year ended March 31, 2025 — a worse-than-expected result that investors viewed as a setback despite strong sales from its flagship Assassin’s Creed title.
The stock closed down 18.32% at €9.55, marking a nearly 60% slide over the past year.
Net bookings tumble, earnings fall short
Net bookings for fiscal year 2024–25 came in at €1.85bn, below guidance and significantly down from €2.32bn the prior year. The company cited “lower than expected partnerships” and timing issues, with digital bookings — comprising 85.9% of the total — also falling 20.2%.
Despite a successful launch of Assassin’s Creed: Shadows in March, which delivered the second-highest Day 1 revenue in franchise history, full-year results were dragged down by weaker back-catalog performance and limited new releases. Operating income on a non-IFRS basis came in at a loss of €15.1m, reversing a €401.4m profit a year earlier.
Ubisoft also posted a full-year IFRS net loss of €159m, compared with a €157.8m profit in FY2023–24. Earnings per share swung to a loss of €1.25, from €1.24 a year earlier.
Free cash flow, however, improved to €127.7m — ahead of target — thanks to cost discipline and improved working capital. Total headcount fell by over 1,200 staff during the year.
CEO: Transformation under way despite industry headwinds
CEO and co-founder Yves Guillemot acknowledged the challenges, citing “intense industry competition” and “mixed dynamics” across Ubisoft’s portfolio. “Despite these headwinds, Ubisoft managed to deliver positive free cash flow generation over the fiscal year,” he said.
He emphasised continued transformation, including:
- A new internal structure to be announced by year-end,
- A €100m cost-reduction plan over two years,
- Prioritisation of “evergreen” IP and live-service models.
Following a pipeline review, Ubisoft has also delayed several major titles to focus on quality — a move expected to front-load stronger content into FY2026–27 and FY2027–28.
Tencent deal to fund new subsidiary and lift debt burden
In March, Ubisoft announced the formation of a new subsidiary dedicated to its three biggest franchises: Assassin’s Creed, Far Cry, and Rainbow Six. Chinese tech giant Tencent will invest €1.16bn for a 25% stake in the unit, with Ubisoft retaining majority control and earning royalties on future revenue.
The deal, expected to close by the end of 2025, will give the new entity an exclusive, perpetual license for the three franchises. Ubisoft estimates the value of the arrangement at over €5bn, including future royalty streams and the subsidiary’s pre-money enterprise value.
The upfront cash injection — at least €500m — will allow Ubisoft to fully deleverage its balance sheet, reducing net debt to around zero from €885m currently.
The new subsidiary will focus on expanding live services, building mobile and Asian market presence, and leveraging Ubisoft’s proprietary Anvil game engine for faster, higher-quality content.
Weak outlook offers little near-term relief
Ubisoft offered cautious guidance for FY2025–26, projecting flat net bookings and break-even non-IFRS operating income. Free cash flow is expected to turn negative due to ongoing investment and restructuring.
However, the company is banking on continued engagement with Assassin’s Creed: Shadows, whose first expansion (Claws of Awaji) is slated for late 2025, as well as the upcoming launch of Rainbow Six Siege X in June.
Other key titles in the pipeline include Anno 117: Pax Romana, Prince of Persia: The Sands of Time Remake, The Division Resurgence, and Rainbow Six Mobile.
Analysts sceptical despite IP strength
While Ubisoft’s core franchises retain strong engagement — with Assassin’s Creed and Rainbow Six each maintaining around 30 million unique active players for the fourth consecutive year — analysts remain sceptical of the company’s near-term trajectory.
Back-catalog bookings declined 13.5% year-on-year, and player monetisation has been impacted by competitive headwinds and shifting consumer habits.
Still, Ubisoft is betting that its structural overhaul and Tencent partnership will position it for long-term profitability and relevance in a rapidly evolving industry.
“Ubisoft is entering a new chapter,” Guillemot said. “I am confident in our ability to build a stronger, more resilient company for the benefit of all our stakeholders.”
