Game On: Ubisoft announces organizational ‘reset,’ cancels six games

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: Among this week’s most notable new game releases is free-to-play hero shooter “Highguard,” developed and published by Wildlight Entertainment, a studio founded by developers who worked on “Apex Legends” and “Titanfall” previously. The game released for PC, PlayStation 5 (SONY), and Xbox Series X/S (MSFT) on January 26. Meanwhile, Bandai Namco’s (NCBDY) action role-playing game “Code Vein II” launches for PC, PS5, and Xbox Series X/S on January 29.

CIRCANA: Circana analyst Mat Piscatella said that increases in consumer spending on subscription services, hardware and mobile content helped the U.S. video game market reach $60.7B in 2025, achieving 1.4% growth when compared to a year ago. Total December projected spending across video game hardware, content and accessories grew 3% when compared to a year ago, to $7.8B. Hardware, subscription and PC content gains drove the increase. December hardware spending increased by 6% when compared to a year ago, to $1.2B. Unit sales in the month fell by 8% versus December 2024, while the average sales price increased by 18%. Annual spending finished 9% ahead of a year ago, at $5.4B. Nintendo Switch 2 led the hardware market in both unit and dollar sales during December and the 2025 year, helping offset year-on-year declines across other platforms. PlayStation 5 placed second across both measures and time periods. Nintendo Switch 2 (NTDOY) finished its 7th month in market with a life-to-date U.S. installed base of 4.4M units, nearly double the installed base of the original Nintendo Switch on a time-aligned basis. Nintendo Switch 2 remains the fastest selling video game console hardware platform in tracked history. Unit sales of Nintendo Switch 2 are 35% ahead of PlayStation 4’s sales pace after 7 months in market.

Mat Piscatella also said that December video game content spending grew 3% in the U.S. when compared to a year ago, to $5.9B. Spending on subscription services increased by 24% when compared to a year ago, while the PC, cloud and non-console VR content segment gained 6%. 2025 annual video game content spending grew 1% compared to 2024, reaching $52.3B. 20% growth in spending on subscription services and a 1% increase in mobile offset declines across other content segments. Activision’s “Call of Duty: Black Ops 7” was December’s best-selling game across physical & tracked digital spending. 2025 marked the seventh consecutive year a “Call of Duty” game has been December’s best seller. EA‘s (EA) “Battlefield 6” finished as 2025’s best-selling video game in tracked full game dollar sales. “Battlefield 6” ranked 1st on both Xbox and the aggregated PC storefronts for the year while placing 2nd on PlayStation behind only Take-Two’s (TTWO) “NBA 2K26.” Epic Games’ “Fortnite” led in total active users across both PlayStation and Xbox platforms during 2025, according to Circana’s Player Engagement Tracker, with over half of all active users on the two ecosystems engaging with Fortnite at least once. Roblox (RBLX) was 2025’s leading publisher in digital at retail spending for both December and the 2025 year. Digital at retail spending on Roblox during 2025 increased by 16% compared to 2024. Other top-selling premium games in the U.S. in December were EA’s “Madden NFL 26” and “EA Sports FC 26,” Nintendo’s “Pokemon Legends: Z-A,” and “Metroid Prime 4: Beyond.” Investors in Epic Games include Tencent (TCEHY), KKR (KKR), Disney (DIS), and Sony.

UBISOFT ‘RESET’: Last week, Ubisoft (UBSFY) announced an organizational, operational and portfolio reset designed to “reclaim its creative leadership, regain agility and drive a sharp rebound, renewing the Group’s trajectory toward sustainable growth and robust cash generation.” This will be delivered through three main pillars: A new operating model; A refocused portfolio with a meaningfully revised 3-year roadmap, and; The rightsizing of the organization. The company said the announcement introduces a radically new value-creation model: a more “gamer-centric organization, structured around creative genres, relying on integrated business units with faster, decentralized decision-making and a greater ability to quickly adapt to players’ expectations.”

Of note, the French game maker said the new operating model will be structured around five Creative Houses. These will be supported by a Creative Network providing development resources, shared Core Services and a reshaped HQ. This new organization will start operating early April. Each Creative House will be organized around a distinct creative genre and designed to concentrate deep expertise in specific types of player experiences. The new Creative Houses include: CH1 (Vantage Studios), focused on scaling and extending Ubisoft’s largest and established franchises, such as “Assassin’s Creed,” “Far Cry,” and “Rainbow Six”; CH2 dedicated to competitive and cooperative shooter experiences; CH3 designed to operate a roster of select, sharp Live experiences, including “For Honor,” “The Crew,” and “Skull & Bones”; CH4 dedicated to immersive fantasy worlds and narrative-driven universes, such as “Anno,” “Might & Magic,” “Rayman,” “Prince of Persia,” and “Beyond Good & Evil”; and CH5 focused on reclaiming position in casual and family-friendly games, such as “Just Dance” and “Idle Miner Tycoon.” In addition, there are 4 new IPs currently in development, including March of Giants.

Meanwhile, Ubisoft added that, in the context of a persistently more selective market as illustrated by the last quarter, and as part of the finalization of the Group’s new operating model, Ubisoft has conducted a thorough review of its content pipeline over December and January. This has led to the strategic decision to refocus its portfolio, reallocate resources and comprehensively revise its roadmap over the next three years. As a consequence, the measures taken are: Ubisoft has discontinued six games that “do not meet the new enhanced quality” as well as more selective portfolio prioritization criteria at Group level. These include “Prince of Persia: The Sands of Time” remake as well as four unannounced titles, including three new IP’s, and a mobile title. In parallel, the Group will allocate additional development time to seven games in order to ensure enhanced quality benchmarks are fully met and maximize long-term value creation. This includes the unannounced title initially planned for FY26, that has been delayed to FY27. The company also lowered its net bookings guidance for FY2025-2026.

ROBLOX: Last week, B. Riley reaffirmed a Buy rating and $125 price target on Roblox shares ahead of its Q4 results on February 5, following a 41% post-Q3 correction. The company is expected to report healthy, though decelerating, bookings growth with margin pressure from higher investments, provide de-risked CY26 guidance, and potentially benefit from the launch of its new game Escape Tsunami for Brainrots! boosting 1Q26 results, the analyst tells investors in a research note.

Meanwhile, Piper Sandler lowered the firm’s price target on Roblox to $125 from $180 and reiterated an Overweight rating on the shares. The firm remains a long-time believer but is lowering estimates starting in the second half of 2027 to reflect more conservatism.

MORE VIDEO GAME NEWS:

• Circana’s Piscatella said that Nintendo’s “Animal Crossing: New Horizons” was the top-selling game in the U.S. last week following the release of the Switch 2 Edition upgrade
• Wolfe Research upgraded Nintendo to Peer Perform from Underperform
• At its Developer_Direct presentation last week, Microsoft’s Xbox business announced a May 19, 2026 release date for open-world racing sim “Forza Horizon 6,” a Fall 2026 release window for role-playing game “Fable,” and unveiled the new game from studio Double Fine called “Kiln”
• Capcom (CCOEY) is experimenting with generative AI tools to speed up development, IGN reports