Following a string of underperforming releases and setbacks, Ubisoft faces pressure from a minority investor, Aj Investment, demanding a complete restructuring. The investor's call for action includes a new management team and significant staff reductions.
Ubisoft Faces Restructuring Demands from Minority Investor
Aj Investment Claims Last Year's Layoffs Insufficient
In an open letter, Aj Investment, a significant Ubisoft shareholder, expressed profound 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 evidence of management's inability to deliver long-term shareholder value. The investor specifically proposed replacing CEO Yves Guillemot, advocating for a new CEO to optimize costs and studio structure for improved agility and competitiveness.
This criticism has impacted Ubisoft's share price, which has reportedly plummeted over 50% in the past year, according to the Wall Street Journal. Ubisoft has yet to publicly respond to the letter.
Aj Investment contends that Ubisoft's low valuation relative to its competitors stems from mismanagement and the perceived advantage taken by the Guillemot family and Tencent. The investor criticizes the company's focus on short-term quarterly results over a long-term strategy focused on delivering exceptional gaming experiences.
Aj Investment's Juraj Krupa further highlighted disappointment over the cancellation of The Division Heartland, a title with significant player anticipation. He also criticized the reception of Skull and Bones and Prince of Persia: The Lost Crown, deeming them underwhelming. Krupa also pointed out the underperformance of several established franchises, including Rayman, Splinter Cell, For Honor, and Watch Dogs, despite their widespread popularity. While Star Wars Outlaws was expected to boost performance, its less-than-stellar reviews and sales have further contributed to the company's struggles. The company's share price is at its lowest since 2015, down over 30% year-to-date.
The letter also proposes substantial staff reductions, citing the higher revenue and profitability of competitors like EA, Take-Two Interactive, and Activision Blizzard, despite their 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. Krupa argues that Ubisoft's 30+ studios are excessive and contribute to inefficiency. While acknowledging previous layoffs (approximately 10% of the workforce), and planned cost-cutting measures, Aj Investment believes these are insufficient to ensure long-term competitiveness. The letter also suggests selling underperforming studios to streamline operations and focus on core IPs.
