Ubisoft is shutting down free-to-play shooter XDefiant and closing production studios in San Francisco and Osaka. Another production team in Sydney is also being "ramped down."

In a note to investors, the French company said XDefiant is being axed following a "thorough review of the game’s performance, profitability, and market conditions." Ubisoft added that it's now being more selective with its R&D investments.

XDefiant launched on May 21, 2024. It will remain active and fully playable until June 3, 2025.

In a separate message to players, Ubisoft explained it has already initiated the sunsetting process, meaning new downloads, player registrations, and purchases are now prohibited.

The company still plans to launch Season 3 of XDefiant but noted refunds will be issued to players who purchased the Ultimate Founders Pack and have made other virtual currency and DLC purchases since November 3, 2024.

Ubisoft retains faith in games-as-a-service titles despite XDefiant failure Come from South African Online Casinos

The shutdown will result in half of the XDefiant team transitioning to other roles within Ubisoft. 277 people will likely be departing the company due to those aforementioned studio closures.

"This decision also leads to the closing of our San Francisco and Osaka production studios and to the ramp down of our Sydney production site, with 143 people departing in San Francisco and 134 people likely to depart in Osaka and Sydney," wrote the company.

Although Ubisoft is culling XDefiant, placing livelihoods and studios on the chopping block, the company said the games-as-a-service model remains a "central pillar" of its strategy.

It cited "notable successes" such as Rainbow Six, The Crew, and For Honor as evidence the model can deliver the goods, but explained XDefiant simply wasn't able to retain enough players to become viable in the freemium shooter market.

"Although XDefiant generated initial excitement it did not retain a large enough player base to establish it as a viable competitor in the free-to-play first-person-shooter genre nor to support the company’s continued investment in its development," added the company. "Ubisoft will apply the lessons learned from XDefiant to future free-to-play titles."

Ubisoft said it remains committed to building a "robust portfolio of proprietary IPs" to deliver long-term value to its stakeholders.