Pixel P&L: Ubisoft Shutters Multiple Studios, Cancels Six Games

Welcome to another Pixel P&L edition. This issue takes 5 minutes to read. If you only have one, here are the 5 most important things:

• Ubisoft cancels six games including the Prince of Persia remake and closes two studios in massive restructuring.

• Mobile gaming revenue flatlines at $81.8B while non-game apps surge 21%, no new games crossed $1B in 2025.

• Netflix shifts focus to cloud gaming, while Xbox launches ad-supported free tier for streaming.

• Starbreeze Studios cuts staff following Payday 3's troubled launch and CEO firing.

• Clair Obscur: Expedition 33 breaks records with 436 GOTY wins, surpassing Elden Ring.

Let's get into it.

Ubisoft Cancels Six Games, Closes Studios in Major Overhaul

Ubisoft Entertainment SA canceled six games and closed two studios as part of a sweeping reorganization aimed at reversing years of poor performance and declining market value.

The French video-game publisher is restructuring its operations into five independent units, each focused on specific game genres. The changes follow weak sales and a minority stake sale to Tencent Holdings.

Among the canceled titles is the long-delayed Prince of Persia: Sands of Time remake and three unannounced original franchises. Seven other games face delays to meet what Ubisoft calls "enhanced quality expectations."

The company shuttered studios in Halifax and Stockholm and plans to cut an additional €200 million in fixed costs over two years. Chief Financial Officer Frederick Duguet said some employees from canceled projects would move to other titles, while others would leave.

The new structure creates genre-specific divisions overseeing franchises including Assassin's Creed, Rainbow Six, and Far Cry. Each unit will manage development, publishing, and financial performance independently. Employees must return to offices five days weekly.

Mobile Gaming Revenue Stalls as Non-Game Apps Surge

Global mobile gaming revenue edged up marginally to $81.8 billion in 2025, while spending on non-game apps jumped 21% to $85.6 billion, according to Sensor Tower's State of Mobile 2026 report.

For the first time, no new mobile games crossed $1 billion in revenue. Instead, apps like ChatGPT led growth, generating over $3 billion in in-app purchases alongside CapCut and WeTV. Eighteen apps total reached the $1 billion threshold, split evenly between games and non-games.

Tencent Holdings Ltd. remained the top publisher by in-app purchase revenue at nearly $8 billion, followed by Scopely and Century Games. Strategy games Last War: Survival and Whiteout Survival led global revenue rankings, ahead of Royal Match and Monopoly Go.

Hybridcasual games showed the strongest growth, with spending rising 17% to $4.2 billion. Pokémon TCG Pocket is projected to surpass $1 billion in 2026.

Roblox dominated game publisher websites, capturing 75% of all visits, though Supercell's web store drew the most traffic at 1.5 billion visits.

⚡️Quick Bytes

Netflix to Prioritize Cloud Gaming Expansion

Netflix Inc. will focus on cloud-based games in 2026, co-CEO Greg Peters told shareholders in the company's fourth-quarter earnings report. About one-third of Netflix subscribers can access TV-based games, with party titles like Boggle and Pictionary reaching 10% of eligible members. Peters said the games boost engagement and retention but called the effort "early stages." The streaming company plans to increase investment based on subscriber value and business returns. Peters said interactive content creates synergies with Netflix's traditional programming.

Xbox to Offer Free Ad-Supported Cloud Gaming

Microsoft Corp. plans to launch an ad-supported tier for Xbox Cloud Gaming, letting users stream games without a subscription, according to The Verge. Players will watch up to two minutes of preroll advertisements to access games they own digitally and daily "Free Play Days" titles. The service will work on PCs, Xbox consoles, and handheld devices. Xbox hasn't disclosed session lengths or final ad durations. The company already offers Cloud Gaming in India starting at ₹589 monthly across three paid tiers. Microsoft is also expanding to select Hisense and V homeOS smart TVs in 2026.

Payday 3 Developer Starbreeze Cuts Staff

Starbreeze Studios laid off employees this week, the latest setback for the Swedish developer behind Payday 3's troubled 2023 launch. Multiple workers confirmed the cuts on LinkedIn Wednesday. The company hasn't officially announced layoffs. QA tester Alexander Pereswetoff-Morath said he was leaving after seven years, while senior tech producer Sabina af Jochnick called her role "at risk of redundancy." Payday 3's rocky debut led Starbreeze to fire CEO Tobias Sjögren in 2023. The studio announced late last year it would "significantly" reduce content investment, though it released an update this month.

⚔️Side Quest

🤣Laugh:

📺 Watch: Hannah Boquet's TEDx Talk flips the parenting script: stop dragging kids into your world and start playing Fortnite in theirs. She argues gaming builds better parent-child communication than forced family dinners, teaches actual workforce skills through esports, and creates low-pressure bonding opportunities. If you've written off gaming as screen addiction, this will change your mind. Sometimes being a good parent means learning to lose at video games.

🎮 Play: MIO: Memories in Orbit nails everything that matters: gorgeous art, expressive combat, a soundtrack that hits hard. The permanent HP loss mechanics feel punishing until you realize the game's balanced around them. It's closer to Ori than Hollow Knight, less punishing but still challenging. 

📚 Read: Niko Partners' 2026 predictions map where Asia's $89 billion gaming market is heading. Insights include predictions like female gamers hitting 40% across the region, mobile growth outpacing the West, and Nintendo Switch 2 facing tariff-driven price hikes. Essential reading for understanding non-Western gaming markets.

💡Did You Know

Clair Obscur: Expedition 33 now holds the record for most Game of the Year awards ever, with 436 wins surpassing FromSoftware's Elden Ring, which earned 429. The French studio Sandfall's debut JRPG has also secured 125 Players' Choice awards, more than any other game in history. Elden Ring managed 97 Players' Choice wins, while The Last of Us Part II earned 115. The game could continue adding to its tally with BAFTA, DICE, and GDC Awards still ahead.

📜 Quote of the Day

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