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 change includes a new management team and significant staff reductions.

Ubisoft Faces Investor Pressure for Restructuring

Aj Investment Claims Last Year's Layoffs Insufficient

In an open letter, Aj Investment, a significant minority shareholder, expressed profound dissatisfaction with Ubisoft's performance and strategic direction. The letter cites the delayed release of key titles, lowered revenue projections for Q2 2024, and overall poor performance as major concerns. The investor explicitly called for a new CEO to replace Yves Guillemot, emphasizing the need for cost optimization and a more agile studio structure.

This pressure 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 compared to competitors stems from mismanagement and the undue influence of the Guillemot family and Tencent. The investor criticizes the company's focus on short-term gains rather than long-term strategic planning and delivering exceptional gaming experiences.

Aj Investment's Juraj Krupa further criticized the cancellation of The Division Heartland, the underwhelming performance of Skull and Bones and Prince of Persia: The Lost Crown, and the perceived rushed release of Star Wars Outlaws, despite high anticipation. Krupa also highlighted the underutilization of popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs.

The letter also proposes substantial staff reductions, citing the higher revenue and profitability of competitors like EA, Take-Two Interactive, and Activision Blizzard, despite having 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 highlighted as an area for significant cost-cutting.

Krupa advocates for streamlining operations, selling underperforming studios, and implementing more aggressive cost reduction measures than the previously announced 150 million EUR cut by 2024 and 200 million EUR by 2025. He emphasizes that the previous 10% workforce reduction is insufficient to address the company's challenges and maintain competitiveness.