Ubisoft in turmoil

Its share price has returned to its lowest level in 2015-2016. (Photo: 123RF)

PARIS – An unpublished call for an all-employee strike in France, a stock market crash, gaming cancellations… French video game giant Ubisoft has been in multiple turmoil since announcing in mid-January that it cut its financial projections for 2022-2022. 2023 financial year.

The Video Game Workers Union (STJV) and Solidaires Informatique on Friday afternoon issued a “call to strike” for all French divisions of Ubisoft to denounce management practices.

According to a trade unionist, this is the “first” strike of this magnitude in Ubisoft’s history since the founding of the publisher that pioneered the Assassin’s Creed series in 1986, Mark Rutschle, trade union spokesman for the Solidaires Informatique section, told AFP.

According to a union source, “at least 100 people” went on strike at Ubisoft’s Paris studio in Montreuil (Saint-Saint-Denis), and a rally was also planned in front of the studio in Montpellier.

“For us, this is a success. The message is clear to management,” emphasizes Mark Rutschle.

Contacted by AFP, management declined to comment.

This protest movement is a fairly rare occurrence in the video game industry, most recently marked by a five-week strike by Activision Blizzard in late 2021, which resulted in the formation of the company’s first union within the company, an American one, last May.

What set the gunpowder on fire at Ubisoft? An internal email sent by CEO Yves Guillemot talking about “structural adjustments” as Ubisoft has committed to save 200 million euros in markets over two years.

“For us, this means plans for downsizing. And when we talk about saving money, it means laying off people, not raising the wages of those who stay. Knowing that we are under pressure, saying: + you decide what is best +, ”criticizes a representative of Solidaires Informatique.

In their press release calling for a strike, the unions are demanding, among other things, “the start of negotiations on wages.”

The “doesn’t convince” strategy

Financially, the French publisher has also fallen heavily on the stock market after announcing in mid-January that it was cutting its financial forecasts for the entire 2022-2023 financial year in the context of “deteriorating macroeconomic conditions.”

Ubisoft revised its revenue growth target downward for 2022-2023, with sales down “more than 10%” from the previous year, despite initially reporting a growth goal of “more than 10%”.

As a result, the price of its shares returned to the lowest levels of 2015-2016. It ended Friday at €19.16, up +1.75%.

“We are disoriented by the scale of the difficulties Ubisoft is facing,” Emmanuel Mato, financial analyst at Oddo BHF, said in a note.

“Ubisoft doesn’t convince,” Charles-Louis Planade, an analyst at Midcap Partners, explains to AFP. “There is clear mistrust at the management level, given the many warnings about the results, as well as the deal the Guillemot family made with Tencent.”

The founding members of the French video game champion, the Guillemot family, formed an alliance with Chinese giant Tencent in early September to secure Ubisoft in the video game market in the face of total consolidation.

Another element against: the 100th postponement of the Skull and Bones game, originally scheduled for November 2022, with Ubisoft also indicating that it had halted development on three “unannounced” titles, in addition to the four halts already announced in July. 2022.

“This is not unique in the industry, in particular due to COVID, but we have the impression that this is much more noticeable at Ubisoft than at other publishers,” Charles-Louis Planade emphasizes again.

“After that, we must not forget that the memory of the market is short. If the band releases an unusual year next year or the next year, everyone will forget,” he adds.

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