Ubisoft Overhaul and Layoffs Stir Investor Unrest

A minority investor, Aj Investment, is demanding a major overhaul at Ubisoft, including a new management team and staff reductions, following a string of underperforming game releases and a significant drop in share price. The investor, in an open letter, expresses deep dissatisfaction with Ubisoft's current performance and strategic direction.

The letter cites the delayed release of key titles, lowered revenue projections, and overall poor performance as reasons for concern about the long-term value for shareholders. Aj Investment specifically calls for a new CEO to replace Yves Guillemot, emphasizing the need for cost optimization and a more agile company structure.

The investor highlights the significant decline in Ubisoft's share price, reportedly down over 50% in the past year, and attributes this to mismanagement and the perceived advantage taken by the Guillemot family and Tencent. The letter criticizes the company's focus on short-term results over long-term strategic planning and delivering exceptional gaming experiences.

Aj Investment's concerns extend to specific game releases, citing disappointment with the cancellation of The Division Heartland and the underwhelming performance of Skull and Bones and Prince of Persia: The Lost Crown. While acknowledging the success of Rainbow Six Siege, the investor points to the underutilization of other popular franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs. Even the highly anticipated Star Wars Outlaws, while expected to boost sales, reportedly underperformed, contributing to the recent share price drop.

The letter also proposes significant staff reductions, citing the higher revenue and profitability of competitors like EA, Take-Two Interactive, and Activision Blizzard, despite having smaller workforces. Aj Investment suggests that Ubisoft's over 30 studios and 17,000 employees are excessive, urging the company to implement substantial cost cuts and staff optimization, including the potential sale of underperforming studios. While acknowledging previous layoffs, the investor believes a much more aggressive approach is necessary to ensure Ubisoft's competitiveness.