Ubisoft has announced that it has hired advisors to explore “transformational strategic and capitalistic options” aimed at maximizing stakeholder value. This move could indicate the company’s interest in a potential buyout deal.
Potential Takeover by Tencent?
The announcement follows speculation from October about Tencent and the Guillemot family potentially taking Ubisoft private. Tencent, a Chinese gaming giant, currently owns a 9.99% stake in Ubisoft and a 49.9% stake in Guillemot Brothers Ltd., the founding family’s holding company. Despite this, the Guillemot family maintains control over Ubisoft’s governance.
The agreement with Tencent includes restrictions preventing Tencent from selling its shares for five years. Ubisoft’s independent Board of Directors will oversee the exploration process, with updates to be provided if negotiations progress.
During the announcement, Ubisoft CEO Yves Guillemot and CFO Frederick Duguet avoided disclosing specific details. “We are actively exploring options, but there’s nothing more we can say at this point,” Duguet commented.
Assassin’s Creed Shadows Delayed Again
Ubisoft also announced another delay for its highly anticipated game, Assassin’s Creed Shadows. Originally set for a November 2023 release, it was postponed to February 2024 and is now scheduled for release on March 20, 2024. The company emphasized its commitment to delivering a polished game and a strong launch experience.
Ubisoft Faces Financial Challenges
Ubisoft has struggled financially, experiencing declining revenue and profit margins, with its stock dropping 44% in 2024.
The company cut its fiscal projections again after a major downgrade in September, reflecting weaker-than-expected holiday sales and the cancellation of XDefiant.
Ubisoft now anticipates fiscal third-quarter net bookings of €300 million, down from the €380 million forecasted in September. Full-year bookings for fiscal 2025 have been revised to €1.9 billion, a decrease from September’s €1.95 billion estimate.
In fiscal 2024, Ubisoft reported €2.3 billion in bookings, but earlier projections for fiscal 2025 suggested “solid growth” at €2.42 billion. These expectations have now been significantly lowered.
The company blamed disappointing launches, including Star Wars Outlaws, for the revised targets. It reported net bookings of €642 million for the first half of fiscal 2025, a 22% decline compared to the previous year. Negative free cash flow amounted to €126 million.
To address these challenges, Ubisoft aims to cut annual fixed costs by over €200 million by fiscal year 2025-26 compared to fiscal 2022-23. It plans to achieve this through targeted cost reductions and selective investments.
“These measures will position Ubisoft for long-term success,” the company emphasized in its Thursday statement.