Plagued by financial difficulties and internal tensions, Ubisoft sees its future darkening, fueled by rumors of takeover by Tencent. The company is banking on savings and updates to its franchises to reassure the markets and its investors.
Results in sharp decline despite players still present
Ubisoft published disappointing financial results for the first half of its 2023-2024 financial year, marked by a significant drop in revenue of almost 20%. These figures confirm a difficult period for the French publisher, known for its successful franchises such as “Assassin's Creed” and “Just Dance”. Although management claims to remain optimistic, this situation forced Ubisoft to revise its annual forecasts downward in September, particularly after a mixed reception for its game “Star Wars Outlaws”, released in August.
To reassure its users and try to regain credibility, Ubisoft is announcing a major update to the game “Star Wars Outlaws”, scheduled for November 21, which should correct the flaws pointed out by players. “ Polarized comments », as underlined by Yves Guillemot, general manager of Ubisoft, illustrate a trend that we find on social networks, where the term “Ubi-bashing” now describes the recurring criticisms against its games.
Despite the economic situation, the number of active players continued to increase over the last twelve months, an encouraging trend which was however not enough to reverse the company's stock market trend, whose shares fell by almost 4 % to reach 13.38 euros on Wednesday.
Ubisoft in search of stability
On a social level, Ubisoft is also shaken. In October, nearly 1,000 employees in France went on strike to protest against the return to face-to-face work, a decision seen as “ very unfair » according to some employees. This movement, a rarity in the video game industry, adds to internal dissensions in the midst of a cost reduction phase initiated at the beginning of 2023. In two years, Ubisoft has made more than 200 million euros in savings, reducing its workforce by more than 2,000 positions to reach 18,666 employees worldwide at the end of September.
This restructuring plan aims to restore profitability and stabilize a company which, a decade ago, was valued at more than 100 euros per share. In September, the latter fell to its lowest level of the decade, at 9.01 euros, revealing the extent of the financial and social challenges weighing on Ubisoft.
In this complex context, persistent rumors of takeover by the Chinese giant Tencent are putting even more pressure on Ubisoft. The Slovak investment fund AJ Investments, minority shareholder of the group, recently reiterated its criticism of Ubisoft's strategic management and requested clarification on takeover speculation. Tencent, which already holds nearly 10% of the capital since 2022, remains bound by an agreement with the Guillemot family, founder of Ubisoft, which prevents the Chinese group from taking control.
At the beginning of October, the Bloomberg agency reignited the rumors by mentioning a potential buyout in collaboration with the Guillemot family. For its part, Ubisoft indicated that it was examining “ all its strategic options » and that it would inform the market “ if necessary », without further details for the moment.
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