Ubisoft Overhaul Looms as Stakeholder Demands Changes

A minority investor, Aj Investment, is demanding significant changes at Ubisoft, including a new management team and staff reductions, following a string of underperforming game releases and a plummeting share price.

Aj Investment Calls for Ubisoft Restructuring

In an open letter, Aj Investment expressed deep dissatisfaction with Ubisoft's performance and strategic direction. The investor cited the delay of key titles, lowered revenue projections, and overall poor performance as reasons for concern about the long-term value for shareholders. A key proposal in the letter was replacing CEO Yves Guillemot with a new CEO focused on cost optimization and a more agile company structure.

The letter highlights Ubisoft's low valuation compared to competitors, attributing it to mismanagement and the perceived advantage taken by the Guillemot family and Tencent. Aj Investment criticizes the company's focus on short-term results over long-term strategic planning and gamer experience, citing the cancellation of The Division Heartland and the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown as examples of poor decision-making. While acknowledging Rainbow Six Siege's success, the investor points out the underutilization of other popular franchises. Even the highly anticipated Star Wars Outlaws, initially seen as a potential turnaround, reportedly underperformed expectations.

Ubisoft's share price has suffered significantly, falling over 50% in the past year and reaching its lowest point since 2015. The company has yet to respond publicly to the letter.

Staff Reductions and Studio Restructuring Proposed

Aj Investment's letter also advocates for substantial staff reductions, pointing to the significantly higher revenues and profitability of competitors like EA, Take-Two Interactive, and Activision Blizzard, despite employing fewer staff. The investor suggests that Ubisoft's over 17,000 employees is excessive compared to its competitors and urges cost-cutting measures and staff optimization. The sale of underperforming studios is also proposed to improve efficiency. While acknowledging previous layoffs, Aj Investment believes further action is necessary to ensure Ubisoft's competitiveness.