Ubisoft said Wednesday that it will scale back its South American business by the end of the year, as studios in the region have failed to meet corporate expectations.
"Ubisoft confirms that development activities in its Brazilian studios will ramp down by the end of this year, as the current market conditions do not permit Ubisoft to achieve the goals initially set for the studios," a Ubisoft corporate representative said in an email to Gamasutra.
The rep added, "Overall this year Ubisoft's global production headcount should remain stable. Ubisoft plans to continue its business presence in Brazil and is currently evaluating opportunities."
The publisher did not disclose exactly how many jobs are at stake or whether the publisher's Brazilian studios would eventually shutter completely.
Ubisoft announced a Sao Paulo, Brazil studio in June 2008, its first studio in South America. At the time, the publisher said it would open the location in July that year with a staff of 20 workers, with a targeted 200-person headcount for the studio in its first four years. It was Ubisoft's 20th development location.
The Sao Paulo location developed family-friendly games including titles in the Imagine series for Nintendo DS. Ubisoft had invested in casual titles on Nintendo platforms, but starting in 2009, the publisher saw significant declines in the DS market. In its fiscal year ended March 2010, the publisher saw substantial decreases in DS software sales.
An anonymous developer from a neighboring game development studio in Brazil tells Gamasutra that the closure of Ubisoft's operations in the country had been anticipated among the local development community for some time. The developer says that local newspaper coverage also attributed the facility's closure to the past year's massive contraction in the casual Wii and DS software market.
Ubisoft Sao Paulo was joined with another Brazilian studio when the publisher acquired Southlogic, a deal announced in early 2009. The studio was also reportedly also slated to work on the Imagine series of games.