In light of recent challenges and disappointing game releases, Ubisoft faces significant pressure from one of its investors to make substantial changes. Aj Investment, a minority shareholder, has openly demanded that Ubisoft go private and overhaul its management team. This call for action comes after a series of setbacks that have left investors, including Aj Investment, deeply concerned about the company's future and its ability to deliver value to shareholders.
Aj Investment's open letter to Ubisoft's Board of Directors, including CEO Yves Guillemot and Tencent, outlines their dissatisfaction. They point to the delayed release of key titles like "Rainbow Six Siege" and "The Division" to March 2025, as well as Ubisoft's lowered revenue expectations for Q2 2024 and overall poor performance. These issues have led Aj Investment to propose a change in leadership, specifically suggesting the replacement of Guillemot with a new CEO who can streamline the company's costs and studio structure to foster a more agile and competitive Ubisoft.
The impact of these concerns is evident in Ubisoft's plummeting share price, which has reportedly dropped over 50% in the past year. According to the Wall Street Journal, Ubisoft had no comment on the letter at this time. Aj Investment has been vocal about their belief that Ubisoft's current valuation suffers due to mismanagement and the influence of the Guillemot family and Tencent, suggesting that the focus on short-term results over long-term strategy has neglected the gaming experience.
Juraj Krupa from Aj Investment further criticized Ubisoft's recent projects, including the cancellation of "Division Heartland" and the underwhelming releases of "Skull and Bones" and "Prince of Persia Lost Crow." He highlighted the success of "Rainbow Six Siege" but noted the neglect of other beloved franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs. Additionally, the launch of "Star Wars Outlaws," which Ubisoft had high hopes for, has underperformed, contributing to a further decline in share price to levels not seen since 2015.
Aj Investment also suggested significant staff reductions to improve Ubisoft's operational efficiency. They compared Ubisoft's workforce of over 17,000 to competitors like Electronic Arts, Take-Two Interactive, and Activision Blizzard, which have higher revenues with fewer employees. Krupa proposed that Ubisoft should consider selling non-essential studios and further reduce its workforce beyond the 10% cut made last year. He emphasized that Ubisoft's announced cost-cutting measures of 150 million EUR by 2024 and 200 million EUR by 2025 are insufficient to maintain competitiveness in the global market.
Ubisoft Minority Investor Urges to Restructure Company
Last Year's 10% Workforce Reduction Not Enough According to Aj Investment
