A minority investor in Ubisoft has issued a stark warning to the company’s board, signaling a looming power struggle over its future. Juraj Krupa of the Slovak hedge fund AJ Investments and Partners penned an open letter expressing deep dissatisfaction with Ubisoft’s current performance and direction, aiming to challenge the control of Ubisoft’s founders, the Guillemot brothers, and their primary backer, Tencent.
Krupa points to delays in critical franchises like Rainbow Six: Siege and The Division and a downward revision of revenue expectations for Q2 2024 as reasons for shareholder unrest. The letter highlights Ubisoft’s significant stock decline, having fallen over 40% in the last year. As a solution, Krupa suggests that Ubisoft either go private or sell to a strategic investor, recommending layoffs and a comprehensive overhaul to reinvigorate the company’s game development. AJ Investments is giving the board a 60-day window to respond to these demands.
The hedge fund rallies other shareholders to stage a coup, leveraging French minority law to initiate a proxy battle and force a sale. Central to their plan is the removal of long-standing CEO Yves Guillemot, whom they hold responsible for Ubisoft’s underperformance. “Ubisoft is mismanaged,” the letter reads, accusing the Guillemot family and Tencent of having the company hostage for personal gain. The firm criticizes Ubisoft’s short-term focus on quarterly results at the expense of delivering quality games that players expect.
AJ Investments, a recent entrant to Ubisoft’s shareholder roster, cites its experience in the gaming industry as a long-time Activision Blizzard shareholder. In the letter, Krupa decries Ubisoft’s release of mediocre titles, including the failed launch of Skull and Bones and the unremarkable Prince of Persia: The Lost Crown. He notes that while some franchises, like Rainbow Six, perform well, fan favorites like Rayman and Splinter Cell have been dormant for years.
Further, Krupa accuses Tencent and the Guillemot family of intentionally keeping Ubisoft’s share price low to consolidate control. AJ Investments asserts that minority shareholders control 70% of the company’s stock, compared to the 25% owned by Guillemots and Tencent. The letter ends by demanding leadership change, further layoffs, and a reduction in Ubisoft’s expansive studio network to boost profitability, arguing that Ubisoft needs fresh air and long-term strategy to succeed.