Ubisoft pulls the plug on XDefiant and closes its studios in San Francisco and Osaka

(Reuters) – France’s biggest video game maker Ubisoft has decided to stop development of its free-to-play first-person shooter title XDefiant, it said on Wednesday.

As a result, Ubisoft will close its production studios in San Francisco and Osaka and scale down production in Sydney, resulting in the loss of 143 jobs in San Francisco and likely a reduction of 134 employees in Osaka and Sydney.

Ubisoft said half of the XDefiant team worldwide will move to other roles within the company.

“The decision follows a thorough review of the game’s performance, profitability and market conditions and is consistent with the company’s increased selectivity in its research and development investments,” Ubisoft said in a statement.

“Season 3 of XDefiant will continue to launch and servers will remain active until June 3, 2025,” it added.

It states that while XDefiant initially attracted attention, it did not have a large enough player base to establish itself as a serious competitor to other free-to-play first-person shooter titles or Ubisoft’s continued investment in the game to support.

“The cancellation of the project shows how tough the shooter market is, where it is difficult to break through between strong IPs that have dominated the segment for years,” said Erste Group analyst Piotr Bogusz.

Ubisoft said it would apply the lessons learned from XDefiant to its future free-to-play titles.

The French group suffered from delays and the poor performance of some key titles, including Star Wars Outlaws, which fell short of sales expectations after its release in August. Its shares have lost half their value so far this year.

Ubisoft added that the games-as-a-service (GAAS) category remains its greatest strength and a central pillar of its strategy, with notable successes such as “Rainbow Six,” “The Crew” and “For Honor.”

(Reporting by Adrianna Ebert in Gdansk; Editing by Milla Nissi)