Is throwing more money at generative AI, especially when your company just posted a record €1.3 billion loss, a sign of strategic brilliance or desperate delusion? Ubisoft’s latest earnings report, which details a historically bad financial year, also coincidentally commits to ‘accelerating investments’ in generative AI. This comes on the heels of a report suggesting early-stage AI integration into an unannounced Far Cry 7 is yielding… less than stellar results.
According to Insider Gaming’s Tom Henderson, an anonymous source inside Ubisoft described the genAI tech being tested in Far Cry 7 as looking “like s**t.” While Henderson later clarified this was for research and development, separate from the standalone Teammates AI project, the timing is, shall we say, unfortunate. Especially when that R&D is being funded by a company that just announced its worst-ever operating loss for fiscal year 2025-26, a figure that dwarfs even the most pessimistic projections.
The Financial Abyss
Let’s talk numbers, because they’re brutal. Ubisoft’s IFRS operating loss hit €1.3 billion. Net bookings, the revenue generated from game sales and in-game purchases, tumbled 17.4% year-over-year to €1.53 billion. This isn’t a blip; it’s a crater. To cope, the company has already cancelled seven projects, delayed six more, and shed around 1,200 jobs. A €1.16 billion cash injection from a Tencent deal certainly propped up the balance sheet, but the company itself admits FY2026-27 will be a ‘low point’ for free cash flow. Betting big on unproven, potentially costly AI technology during such a period feels less like bold innovation and more like playing roulette with the last chip.
The GenAI Gamble: Teammates and Beyond
Ubisoft’s earnings report outlines a clear strategy: ramp up generative AI. The focus is on ‘Teammates,’ described as their ‘first playable Generative AI experience.’ Built on Google Gemini and demonstrated behind closed doors, Teammates aims to turn NPCs into conversational companions capable of remembering player interactions. They’ve also partnered with Nvidia and Inworld AI for ‘Neo NPC’ demos. Beyond player-facing experiences, AI-powered QA bots and dynamic NPCs are also on the roadmap. The company’s language echoes past pronouncements, including the ill-fated Quartz NFT platform, which resulted in intense player backlash and was swiftly abandoned after its integration into Ghost Recon Breakpoint. History, it seems, doesn’t always repeat itself gracefully.
This renewed push for AI comes after a disastrous single-day share price collapse of 34% following a restructuring announcement that highlighted ‘accelerated investments behind player-facing Generative AI.’ The market, it appears, wasn’t sold on the idea then, and a near €1.3 billion loss certainly doesn’t inspire confidence now.
Is ‘Sh*t’ AI the Future of Far Cry?
So, what does this all mean for the future of franchises like Far Cry, Assassin’s Creed, and Ghost Recon? The report indicates new entries in these series are slated for release before March 2029. But will they feature the cutting-edge AI Ubisoft is so keen to invest in? If Henderson’s report holds any water, the current iteration of AI tech being tested in Far Cry 7 is far from ready for prime time, let alone a flagship title. It raises the question: is Ubisoft prematurely integrating nascent, unproven technology into games that are already struggling with development or market reception? Chasing the AI hype train while a significant chunk of your business is demonstrably failing is a risky strategy, one that could alienate players further and drain precious resources.
It’s a stark reminder that technological enthusiasm must be tempered with market reality and, crucially, demonstrable product quality. Simply slapping ‘AI-powered’ onto features doesn’t guarantee success, especially when the underlying tech is described as visually subpar. For Ubisoft, the question isn’t just if AI will be in their games, but when and how it will actually enhance the player experience without becoming another costly misstep.
What About Ubisoft’s Record Loss?
Ubisoft’s recent financial report reveals an IFRS operating loss of €1.3 billion for fiscal year 2025-26, marking its worst year on record. This significant loss is attributed to a combination of factors including project cancellations, delays, and substantial job cuts, alongside a general decline in net bookings. A cash injection from Tencent helped stabilize the balance sheet, but the company anticipates FY2026-27 to be a low point for free cash flow before a projected rebound.
Why is Ubisoft Investing Heavily in AI?
Despite its financial struggles, Ubisoft is prioritizing increased investment in generative AI. This strategic pivot is aimed at enriching player experiences through new features, such as conversational NPCs powered by AI (like the ‘Teammates’ project) and AI-driven QA systems. The company views AI as a key component of its future operating model, intending to integrate it across development and gameplay, even as it navigates a period of significant financial restructuring.
FAQ
Will generative AI ruin Far Cry 7?
There’s no concrete evidence yet that the generative AI being tested will be a permanent or detrimental feature in Far Cry 7. Insider reports suggest the tech is in early R&D and currently performs poorly, but Ubisoft hasn’t confirmed its inclusion in the final game. The primary concern is the company’s aggressive pursuit of AI integration amidst significant financial challenges.
