Ubisoft Entertainment SA (OTC:UBSFF) has confirmed the closure of its free-to-play shooter XDefiant, which launched in May.

Alongside this decision, the company is shutting down three production studios and laying off 277 employees.

Marie-Sophie de Waubert, Ubisoft's Chief Studios and Portfolio Officer, shared the news on the company's website. Despite initial success, XDefiant failed to meet Ubisoft's expectations for a sustainable player base in the competitive free-to-play FPS market.

"Despite an encouraging start, the team's passionate work, and a committed fan base, we've not been able to attract and retain enough players in the long run to compete at the level we aim for in the very demanding free-to-play FPS market," de Waubert explained.

The decision to sunset XDefiant was driven by its inability to justify further investment. While new downloads, player registrations, and purchases have ceased as of today, the game's servers will remain online until June 3, 2025, allowing players to enjoy the planned Season 3 content.

Studios Close Amid Layoffs

The shutdown of XDefiant also impacts Ubisoft's workforce. The company has announced the closure of its San Francisco and Osaka production studios and plans to scale down operations in Sydney. These closures will result in 277 job losses, affecting more than half of the global XDefiant team. Remaining employees will be reassigned to other projects within Ubisoft.

"To those team members leaving Ubisoft," de Waubert stated, "I want to express my deepest gratitude for your work and contributions. Please know that we are committed to supporting you during this transition."

Challenges For Ubisoft

The decision comes as Ubisoft faces ongoing struggles with underperforming releases and delays. Earlier this year, the company reported significantly lower-than-expected earnings, leading to the cancellation of several projects and targeted restructuring initiatives.

Recent setbacks include the cancellation of The Division: Heartland after three years of development and the delay of Assassin's Creed Shadows following the underwhelming launch of Star Wars Outlaws.

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