Frustrated Investor Urges Ubisoft to Go Private Amid Falling Shares and Struggling Game Releases”

In recent weeks, Ubisoft, the studio behind the iconic Assassin’s Creed franchise, has found itself in a precarious position. Following the release of Star Wars Outlaws, Ubisoft’s stock has taken a significant dip, raising concerns among shareholders. One of these shareholders, a minority investor from Slovakia-based AJ Investments, has publicly called for drastic changes—namely, taking the company private or selling it to a strategic investor.

Let’s unpack what’s going on with Ubisoft, the complaints from investors, and what the future may hold for one of the biggest names in the gaming industry.

A Call to Go Private: The Investor’s Demands

The Wall Street Journal reports that AJ Investments, which holds less than 1% of Ubisoft shares, has had enough. The hedge fund issued an open letter to Ubisoft’s board of directors, including CEO Yves Guillemot and fellow investor Tencent, demanding the company either go private or be sold off to a strategic buyer. In its letter, the fund did not mince words, accusing Ubisoft of being mismanaged, with shareholders left “hostages” to the Guillemot family and Tencent.

What’s at stake here? According to the investor group, Ubisoft’s current leadership has allowed the company’s value to drop, and the disappointing launch of recent titles has only worsened the situation. AJ Investments even hinted at a possible proxy fight if Ubisoft doesn’t take their concerns seriously, which would see them rallying other shareholders to force a sale or major leadership changes.

Star Wars Outlaws and XDefiant: The Culprits?

It seems that Ubisoft’s Star Wars Outlaws has been at the center of the storm. The game, developed by Massive Entertainment, received mixed reviews upon launch, with IGN giving it a 7/10 and describing it as a “fun intergalactic heist adventure” but criticized for its repetitive combat, simple stealth mechanics, and launch bugs. Despite the high hopes pinned on this open-world Star Wars title, it hasn’t managed to meet the sky-high expectations of investors, leading to a sharp decline in the company’s share price.

But the blame doesn’t stop with Star Wars Outlaws. Ubisoft’s free-to-play first-person shooter XDefiant, which was supposed to be a competitor to Call of Duty, also seems to be struggling to make a splash. With both games falling short of hitting the mark, investors are starting to lose patience.

A History of Struggles: More Than Just a One-Time Thing

Star Wars Outlaws and XDefiant might be the current focus of frustration, but according to AJ Investments, the problems at Ubisoft run deeper than just a few underperforming titles. The investor group pointed out that several of Ubisoft’s most beloved franchises are either in limbo or haven’t been living up to expectations.

Franchises like Rayman, Splinter Cell, For Honor, and Watch Dogs have been “sleeping for years,” according to the open letter. Even the much-anticipated Skull and Bones and the free-to-play The Division Heartland haven’t been able to recapture the magic. And while Rainbow Six Siege continues to perform well, that’s only one success story among several letdowns.

As for Ubisoft’s highly anticipated Assassin’s Creed Shadows, set for release in November, the pressure is now sky-high. Investors are looking to this title to help restore some of the company’s lost value, with many hoping it will give the company’s bottom line the boost it desperately needs.

Ubisoft’s Response and the Road Ahead

Ubisoft has yet to comment directly on the investor’s open letter or the commercial performance of Star Wars Outlaws. However, CEO Yves Guillemot previously mentioned the company’s “solid” start to the financial year and expressed confidence in Ubisoft’s future, citing a “strong upcoming release slate” that includes both Star Wars Outlaws and Assassin’s Creed Shadows.

“We are excited about the future and confident in the sustained progress of our turnaround throughout the year,” Guillemot stated. However, as share prices continue to fluctuate and investors express dissatisfaction, it’s clear that the clock is ticking for Ubisoft to deliver.

Is Privatization the Answer?

One of the central demands from AJ Investments is for Ubisoft to go private or sell to a larger, strategic investor. In theory, taking Ubisoft private would remove the immediate pressure from public shareholders, giving the company time to course-correct without the constant scrutiny of the stock market. However, going private is no easy feat, especially for a company the size of Ubisoft, and it would likely involve substantial financial backing—perhaps from Tencent, who already holds a stake in the company.

The idea of selling to a larger company is also on the table. With major players like Microsoft and Sony constantly on the lookout for acquisitions, a Ubisoft sale isn’t completely out of the question. Still, it would likely be a move of last resort, given the long history and familial ties of the Guillemot family to the company.

The Future of Ubisoft: A Make or Break Moment

What happens next? The fate of Ubisoft seems to rest heavily on how Assassin’s Creed Shadows performs in November. If it manages to capture the hearts of gamers and generate strong sales, it could be the lifeline Ubisoft needs to stay afloat in an increasingly competitive gaming market.

However, if Assassin’s Creed Shadows falls short, the calls for major changes—whether that be a sale, privatization, or new leadership—are likely to grow louder. With frustrated investors breathing down Ubisoft’s neck, it’s clear the company is at a crossroads. Will Ubisoft find its footing again, or will this be the beginning of the end for its current leadership?

Only time will tell, but one thing’s for sure—2024 is shaping up to be a pivotal year for the Assassin’s Creed maker.

Final Thoughts

The recent shares slump has placed Ubisoft in the hot seat, with investors calling for radical changes. From Star Wars Outlaws’ lukewarm reception to the struggles of XDefiant, Ubisoft is navigating choppy waters. And while AJ Investments may be a minority stakeholder, their vocal demands echo the frustration of a broader group of shareholders.

Whether Ubisoft decides to go private, sell to a strategic investor, or continue under current leadership, the next few months will be critical for the company’s future. All eyes are now on Assassin’s Creed Shadows—it might just be Ubisoft’s last hope to turn things around.