Unrest At Ubisoft As Investors Call For Change in Management

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Unrest At Ubisoft As Investors Call For Change in Management

As a seasoned gamer with a decade-long attachment to Ubisoft’s iconic franchises like Assassin’s Creed and Watch Dogs, I can’t help but feel a sense of unease as the once mighty developer seems to be on the ropes. The recent financial struggles and investor demands for restructuring are just the latest blows in what appears to be an increasingly turbulent journey for Ubisoft.

Ubisoft is currently facing tough times. Their share prices have dropped significantly and their recent game releases haven’t been particularly successful. To make matters worse, some of the company’s investors are pushing for significant changes within the organization. This could lead to a major overhaul at Ubisoft.

Juraj Krupa, founder of Ubisoft’s minority owner AJ Investments, sent an open letter to stakeholders, criticizing management and demanding change.

In Krupa’s letter, he expressed his belief that Ubisoft is currently underestimated and could be worth between $44 and $49 per share. He outlined several issues such as game delays, blocked acquisitions, a declining reputation, and other factors as reasons why improvements are necessary.

Krupa’s letter focuses on a claimed partnership between the founding members of Ubisoft, the Guillemot family, and the massive corporation Tencent, China.

For the purpose at hand, Krupa advocated for Ubisoft to transition into private ownership, carry out cost-cutting measures and staff restructuring, concentrate on their main intellectual properties, and most importantly, undergo a leadership change.

It’s worth mentioning that Krupa’s company owns less than 1% of Ubisoft. If his requests are not granted, Krupa plans to unite with other like-minded minority shareholders to intensify their opposition towards Ubisoft’s management.

It has long been understood within the gaming industry that the company behind Assassin’s Creed has been losing money. However, not many people believed that this financial struggle had escalated to such a critical level so soon.

It remains to be seen if Ubisoft’s major shareholders will support Krupa’s letter, or if he’ll need to garner backing from the smaller investors instead.

Do I Smell A Coup At Ubisoft?

Unrest At Ubisoft As Investors Call For Change in Management

In a recent letter by Krupa, the main topic of worry appears to be rumors of a potential takeover of Ubisoft by Guillemot and Tencent, as Ubisoft faces financial struggles.

Originally, the Guillemot family established Ubisoft, and they currently own approximately 13% of the company’s stocks—the highest percentage among all shareholders. However, according to Krupa, there are allegations that the Guillemot family has conspired with Tencent to increase their stake further.

Krupa claims that when Tencent purchased a 49.9% stake in Guillemot Brothers Limited at $88 per share in 2022, it was essentially paving the way for the Guillemots to acquire it back at a significantly lower price of around $20 per share later on. If these claims are accurate, then Ubisoft’s recent errors could be more strategic than they appear to be.

At the time of writing, no stakeholder, nor Ubisoft management, has replied to Krupa.

It isn’t clear why Tencent might prefer helping the Guillemots seize complete power over Ubisoft rather than designating a new CEO, as Krupa proposed.

Essentially, Krupa is attempting to take action ahead of the Guillemots, perhaps something akin to a surprise move. However, it doesn’t seem like anyone predicted such an event in their list of expectations for Ubisoft in 2024.

A colossal Chinese company boasts a deep-rooted tradition of making investments beyond its native land. Its investment holdings, worth billions, in the gaming sector have become a dominant force, leaving little room for overlooking their impact.

However, it remains unclear whether Ubisoft’s investment in Guillemot Games is simply one of many in their extensive portfolio, or if it serves a more strategic purpose within Guillemot Games’ business plan.

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2024-09-10 17:08