In the wake of several setbacks and the underwhelming performance of recent releases, Ubisoft faces demands from one of its investors to overhaul its management and reduce its workforce significantly.

Ubisoft Minority Investor Urges to Restructure Company

Last Year's 10% Workforce Reduction Not Enough According to Aj Investment

Ubisoft's minority investor, Aj Investment, has called upon the company's Board of Directors, including CEO Yves Guillemot and Tencent, to consider going private and installing a new management team. In an open letter, the investors expressed their "deep dissatisfaction with the current performance and strategic direction of the company." They pointed to the postponement of key titles like "Rainbow Six Siege" and "The Division" to March 2025, alongside Ubisoft's lowered revenue outlook for Q2 2024 and overall poor performance, as reasons for their heightened concerns about the management's ability to deliver long-term shareholder value. Aj Investment suggested replacing Guillemot with a new CEO who could "optimise the cost and studio structure for a more agile and competitive company."

Following the letter, Ubisoft's share price reportedly fell, dropping "more than 50% over the past 12 months," according to the Wall Street Journal. A Ubisoft spokesperson told WSJ that the company had "no comment on the letter at this time."

Aj Investment criticized the current management for being "mismanaged" and claimed that shareholders are "hostages of Guillemot family members and Tencent." They argued that the management's focus on quarterly results is at the expense of a long-term strategy that could enhance the gaming experience for players.

Juraj Krupa of Aj Investments further criticized Ubisoft for canceling "Division Heartland," a move that disappointed many gamers, and for the underwhelming releases of "Skull and Bones" and "Prince of Persia Lost Crow." He noted that while "Rainbow Siege" performs well, other beloved franchises like "Rayman," "Splinter Cell," "For Honor," and "Watch Dogs" have been neglected. Krupa also mentioned that "Star Wars Outlaws," which Ubisoft heavily relied on to boost its performance, did not meet sales expectations, contributing to a further decline in the company's share price, which reached its lowest level since 2015 and dropped over 30% since the start of the year.

Krupa proposed significant staff reductions, highlighting that competitors like Electronic Arts (EA), Take-Two Interactive, and Activision Blizzard achieve higher revenues and profitability with fewer employees. He pointed out that Ubisoft employs over 17,000 staff, compared to EA's 11,000, Take-Two's 7,500, and Activision Blizzard's 9,500, despite having fewer blockbuster titles. He urged Ubisoft to implement "significant cost reductions and staff optimization" to improve operational efficiency and suggested selling studios not essential for developing Ubisoft's main IPs. Krupa emphasized that the previous 10% workforce reduction was insufficient and criticized Ubisoft's plan to cut fixed costs by 150 million EUR by 2024 and 200 million EUR by 2025 as not aggressive enough to remain competitive in the global market.