Following several setbacks and disappointing performance of recent releases, Ubisoft faces pressure from a minority investor, Aj Investment, demanding a management overhaul and staff reductions.
Ubisoft Minority Investor Calls for Company Restructuring
Aj Investment Claims Last Year's 10% Workforce Reduction Insufficient
Aj Investment, a significant Ubisoft shareholder, has publicly urged the company's board, including CEO Yves Guillemot and Tencent, to take the company private and install new leadership. In an open letter, they expressed profound dissatisfaction with Ubisoft's current performance and strategic direction.
The letter cites the delayed release of key titles like Rainbow Six Siege and The Division to late March 2025, a lowered Q2 2024 revenue outlook, and overall poor performance as major concerns. Aj Investment directly proposes replacing Guillemot as CEO, stating their desire for "a NEW CEO who will optimise the cost and studio structure for a more agile and competitive company."
This criticism has impacted Ubisoft's share price, which, according to the Wall Street Journal, has plummeted over 50% in the past year. Ubisoft has yet to officially respond to the letter.
Aj Investment contends that Ubisoft's low valuation compared to competitors stems from mismanagement and the perceived undue influence of the Guillemot family and Tencent. They accuse the current management of prioritizing short-term gains over long-term strategic planning and delivering exceptional gaming experiences.
Aj Investment's Juraj Krupa further criticized the cancellation of The Division Heartland, a highly anticipated title, and the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown. He also pointed to the underperformance of several established franchises, stating, "Rainbow Siege is doing great, nevertheless franchises such as Rayman, Splinter Cell, For Honor, Watch Dogs are sleeping for years despite these games being loved by millions of players worldwide." He expressed concerns about the rushed release of Star Wars Outlaws, despite high expectations.
Ubisoft's reliance on Star Wars Outlaws to revitalize its fortunes proved unsuccessful, contributing to a share price decline that has reached its lowest point since 2015, adding to a more than 30% drop year-to-date.
Beyond leadership changes, Krupa advocates for significant staff reductions, highlighting that competitors like Electronic Arts, Take-Two Interactive, and Activision Blizzard achieve higher revenue and profitability with smaller workforces. He notes Ubisoft's 17,000+ employees compared to EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.
Krupa urges Ubisoft to implement cost-cutting measures and staff optimization to improve operational efficiency, suggesting the sale of studios not crucial to core IP development. He considers Ubisoft's 30+ studios excessive and detrimental to future profitability. While acknowledging previous layoffs (approximately 10% of the workforce), he insists that further, more aggressive cost-cutting measures are necessary to remain competitive.
