Following recent game release setbacks and underwhelming performance, Ubisoft faces pressure from an investor demanding a management overhaul and staff reductions.
Ubisoft Investor Calls for Company Restructuring
Aj Investment Claims Last Year's Layoffs Insufficient
Minority investor Aj Investment has publicly urged Ubisoft's board, including CEO Yves Guillemot and Tencent, to take the company private and install new leadership. In an open letter, they expressed dissatisfaction with the company's performance and strategic direction.
The letter cites the delayed release of key titles (Rainbow Six Siege and The Division until late March 2025), lowered Q2 2024 revenue projections, and overall poor performance as reasons for concern regarding the management's long-term viability. Aj Investment specifically proposed replacing Guillemot as CEO, advocating for a new leader to optimize costs and studio structure for improved agility and competitiveness.
Ubisoft's share price has suffered, reportedly falling over 50% in the past year (Wall Street Journal), with the company declining to comment on the investor's letter.
Aj Investment criticizes Ubisoft's management, claiming its focus on short-term results rather than long-term strategy has negatively impacted shareholder value. They point to the cancellation of The Division Heartland as a missed opportunity and express disappointment with the reception of Skull and Bones and Prince of Persia: The Lost Crown.
The investor also highlights underperforming franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs, despite their popularity. While Star Wars Outlaws was anticipated to boost performance, its reportedly underwhelming sales further contributed to the company's share price decline, reaching its lowest point since 2015.
Aj Investment's letter also suggests significant staff reductions, citing that competitors like EA, Take-Two Interactive, and Activision Blizzard achieve higher revenue and profitability with smaller workforces. Ubisoft's 17,000+ employees are contrasted with EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500.
The investor argues that Ubisoft's planned cost-cutting measures are insufficient and urges further staff optimization and the potential sale of underperforming studios. The current structure of over 30 studios is deemed excessive. While acknowledging previous layoffs (approximately 10% of the workforce), Aj Investment insists more drastic action is needed to ensure Ubisoft's competitiveness.
