Estimated reading time: 3 minutes
Ubisoft is going through some tough times. Last week, the French company’s stock plunged to a ten-year low. Allegedly due to the underperformance of the action-adventure game Star Wars Outlaws, from which more was expected, and a sharp drop in interest in the free-to-play shooter XDefiant. The situation did not improve on Monday, and investors gradually lost patience. A significant minority investor, through the firm AJ Investments, has even called on Ubisoft to make substantial changes. In an open letter, he writes about the mismanagement of the company by Yves Guillemot. The Guillemot family and Tencent are allegedly exploiting shareholders.
Investor Calls for New Leadership and Strategic Shifts
“The management is focused on pleasing investors by delivering better quarterly results rather than a long-term strategy to deliver exceptional experiences for players,” the letter says. The investor has been a long-time shareholder of Activision Blizzard and cannot understand the current management’s focus on releasing a few mediocre games a year that damage Ubisoft’s reputation in the gaming community. Instead, he wants blockbuster games from Ubisoft’s exceptional portfolio of brands. The shareholder is calling for a new CEO and cost-cutting, including optimizing the number of employees (currently over 19,000) to keep Ubisoft competitive. He believes the previously announced strategy (reducing fixed costs by €150 million by 2024 and €200 million by 2025) is insufficient. He even proposes selling some studios to reduce debt.
Future Prospects and Ubisoft’s Response to the Crisis
Last but not least, Ubisoft should consider turning into a private company. Yves Guillemot previously reassured investors that Assassin’s Creed Shadows will be released at the end of this year and should be a blockbuster just like Valhalla. But until then, shareholders have to hold out. I’m surprised the investor didn’t bring up the Skull and Bones debacle. Recall that Ubisoft‘s share price has fallen by over 50% last year. On Monday, it was trading at 13.67 euros. Ubisoft, meanwhile, is trying to lure gamers to XDefiant. So, it offers bonuses to anyone who signs up for the free game. Until Sept. 24, anyone who logs into the game should receive a different daily bonus, including a battle pass, an extra XP pack, or a weapon.
