French megapublisher Ubisoft reported its earnings yesterday, and chief financial officer Frederick Duguet gave some insight into how the company creates value for its shareholders. During a conference call with investors, Duguet said that releasing three-to-four annual blockbusters is not “a proper indication of [Ubisoft’s] value-creation dynamics.” Instead, Ubisoft expects to make more money from focusing on more free-to-play live-service games.
Many fans took Duguet’s comments to mean that Ubisoft is going to make fewer triple-A games. But the company followed up with a statement today to alleviate those concerns.
Here’s that statement from a Ubisoft spokesperson:
Our intention is to deliver a diverse line-up of games that players will love — across all platforms. We are excited to be investing more in free-to-play experiences, however we want to clarify that this does not mean reducing our triple-A offering. Our aim is to continue to deliver premium experiences to players such as Far Cry 6, Rainbow Six: Quarantine, Riders Republic, and Skull and Bones, to name a few, while also expanding our free-to-play portfolio and strengthening our brands to reach even more players.
To translate, Ubisoft is basically saying that this is about doing more with free-to-play.
“[Duguet’s comment was] in reference to free-to-play becoming a larger share of the revenue pie, not an indication that there will be less traditional paid games like Assassin’s Creed,” Ubisoft senior analyst Sean Lama said on Twitter. “The content mix is expanding, not changing. A good [comparison] is the evolution of Call of Duty since Warzone.”
Call of Duty still has a premium option that launches ever fall at retail, but Activision also runs the free-to-play Call of Duty: Warzone and Call of Duty Mobile.
Ubisoft was already making fewer games
During a 2018 presentation for investors, Ubisoft chief executive officer Yves Guillemot said the company wanted to make fewer games. Rainbow Six: Siege was able to bring in steady, predictable revenue for years thanks to its live-service components, and the company wanted to invest more in that model.
“[Ubisoft’s] success reflects the industry’s move towards a model that is less dependent on releasing new games,” Guillemot said in 2018. “New releases now only represent a part of our business, which is now focused on long-term engagement with our player communities.”
As part of that strategy, Ubisoft gave up on annual releases for games like Assassin’s Creed. Instead of releasing a new Assassin’s Creed yearly, it’s now regularly taking a year off. To compensate, it’s making those games even larger and with more hooks to keep players engaged for weeks and months.
Assassin’s Creed and Tom Clancy games will still act as pillars for Ubisoft’s revenue. But it also expects its growth to come from spending less to produce fewer games. And those games will be online, connected, and have long-term engagement. That was true in 2018 as well.
“We overhauled our portfolio, developing numerous multiplayer games in recent years which have dramatically increased player engagement in the Ubisoft world,” Guillemot said in 2018. “Our players not only play for more hours at a time, but do so over a period of months or even years. We are thus able to offer them new experiences and content, thereby extending the lifetime of our games.”
That’s Ubisoft’s plan for the newly announced The Division: Heartland. This free-to-play shooter will act as an additive experience to the premium Division games. And expect the publisher to do more free-to-play games just like this.