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Following a string of underperforming releases and setbacks, Ubisoft faces pressure from a minority investor, Aj Investment, to overhaul its management and reduce its workforce.
Aj Investment Calls for Ubisoft Restructuring
Previous Layoffs Insufficient, Investor Claims
Aj Investment, a significant minority shareholder, has publicly demanded that Ubisoft go private, install new leadership, and implement substantial restructuring. In an open letter addressed to the Board of Directors, including CEO Yves Guillemot and Tencent, the investor expressed deep dissatisfaction with the company's performance and strategic direction.
The letter cites the delayed release of key titles (Rainbow Six Siege and The Division slated for March 2025), lowered Q2 2024 revenue projections, and overall poor performance as major concerns. Aj Investment specifically proposed replacing Guillemot as CEO, advocating for a leader who can optimize costs and studio structure for enhanced agility and competitiveness.
This pressure has impacted Ubisoft's stock price, which has reportedly plummeted over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to publicly respond to the letter.
Aj Investment contends that Ubisoft's undervaluation stems from mismanagement and the perceived advantage taken by the Guillemot family and Tencent. The investor criticizes the company's focus on short-term gains rather than long-term strategic planning and delivering exceptional gaming experiences.
Aj Investment's Juraj Krupa further criticized the cancellation of The Division Heartland, the underwhelming performance of Skull and Bones and Prince of Persia: The Lost Crown, and the perceived underperformance of Star Wars Outlaws despite high expectations. Krupa also highlighted the underutilization of established franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs.
The underperformance of Star Wars Outlaws, a title Ubisoft heavily relied on, contributed to a significant drop in share price, reaching its lowest point since 2015 and adding to a 30% year-to-date decline.
Beyond leadership changes, Aj Investment urges significant cost-cutting measures, including staff reduction. Krupa points to the higher revenue and profitability of competitors like EA, Take-Two Interactive, and Activision Blizzard, despite employing fewer staff. Ubisoft's 17,000+ employee count dwarfs those of its competitors, prompting calls for staff optimization and the potential sale of underperforming studios.
While acknowledging previous layoffs (approximately 10% of the workforce), Krupa insists these measures are insufficient and urges more aggressive cost-cutting targets to maintain competitiveness in the global gaming market.
