Ubisoft to shut down two global game studios, one in San Francisco and the other in Osaka

Ubisoft is making more deep cuts to reduce spending, this time leading to layoffs of over 200 people.

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Yesterday, Ubisoft announced it was sunsetting its failed first-person shooter XDefiant. The game is effectively locked off from access, and will be taken offline in June 2025. The decision was a simple one to make: XDefiant wasn't profitable, and showed no signs of becoming profitable as soon as Ubisoft would've hoped. Rather than keep paying for upkeep, maintenance, and further content production, Ubisoft decided to freeze XDefiant and essentially start winding it down.

The game cancellation wasn't the only bad news from yesterday's announcement. Ubisoft is also closing down two studios in this cost-cutting pass. Production groups in San Francisco, USA and Osaka, Japan have been closed and the layoffs are expected to affect around 277, Game File's Stephen Totilo reports.

Roughly half of XDefiant's dev team has been diverted to other projects.

The news was confirmed in an internal memo that was acquired by Insider Gaming's Tom Henderson, who had also previously reported that Ubisoft would shutter these studios.

"The announcement by Marie-Sophie regarding the discontinuation of XDefiant, the closure of the San Francisco and Osaka studios, and the ramp down of the Sydney production site is among the difficult decisions we've had to make," Ubisoft CEO Yves Guillemot said in the memo.

Amid disappointing results, Ubisoft is racing towards better profitability. The company reported double-digit year-over-year drops across net bookings, digital revenues, player recurring investment, and back catalog game sales in its first-year 24-25 fiscal earnings.