Following recent setbacks and disappointing performance of its latest releases, Ubisoft faces pressure from an investor demanding a management overhaul and staff reductions.
Ubisoft Minority Investor Calls for Company Restructuring
Aj Investment Claims Last Year's 10% Workforce Reduction Insufficient
Minority investor Aj Investment has publicly urged Ubisoft's Board of Directors, including CEO Yves Guillemot and Tencent, to take the company private and install new leadership. In an open letter, the investors expressed profound dissatisfaction with the company's current performance and strategic direction.
They cited the delayed release of key titles like Rainbow Six Siege and The Division to late March 2025, alongside lowered Q2 2024 revenue projections and overall poor performance, as major concerns. These issues, they argue, cast doubt on management's ability to deliver long-term shareholder value. Aj Investment even proposed replacing Guillemot as CEO, stating: "Change of the current management. Start hiring process of NEW CEO who will optimise the cost and studio structure for more agile and competitive company as Ubisoft should be."
Ubisoft's share price has suffered, reportedly plummeting over 50% in the past year, according to the Wall Street Journal. A company spokesperson offered no comment on the letter.
Aj Investment's letter further criticized Ubisoft's management, asserting that its low valuation compared to competitors stems from mismanagement and that shareholders are being exploited by the Guillemot family and Tencent. They accused the management of prioritizing short-term gains over long-term strategic planning and delivering exceptional gaming experiences.
Aj Investment's Juraj Krupa specifically criticized the cancellation of The Division Heartland, a highly anticipated title, and expressed disappointment with the underwhelming reception of Skull and Bones and Prince of Persia: The Lost Crown.
He also highlighted the underperformance of several established franchises: "Rainbow Siege is doing great, nevertheless franchises such Rayman, Splinter Cell, For Honor, Watch Dogs are sleeping for years despite these games are loved by millions of players all around the world," he noted. The launch of Star Wars Outlaws, while anticipated, reportedly fell short of expectations, further contributing to the company's share price decline to its lowest levels since 2015—a drop exceeding 30% year-to-date.
The letter also advocates for significant staff reductions. Krupa pointed to Electronic Arts (EA), Take-Two Interactive, and Activision Blizzard as examples of companies achieving higher revenue and profitability with smaller workforces. Ubisoft's over 17,000 employees, compared to EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500, are cited as evidence of overstaffing.
Krupa urged for cost-cutting measures and staff optimization to enhance operational efficiency. He suggested selling studios deemed unnecessary for the development of core IPs, noting that Ubisoft's 30+ studios are excessive. While acknowledging previous layoffs (approximately 10% of the workforce), he insists that further reductions are necessary, despite announced plans to cut fixed costs by €150 million by 2024 and €200 million by 2025. He believes these measures are insufficient to maintain competitiveness in the global gaming market.
