Ubisoft’s Crucible: Navigating Its Toughest Year Yet

The year 2024 has been nothing less than a catastrophe for Ubisoft. It can definitely be said that the company has endured a challenging few years. The price of Ubisoft’s shares has plummeted from its peak of €84.60 in February 2021 to just €12.53 at the present, representing an enormous 85% drop in stock valuation from its highest point. To illustrate, if you had invested $1000 in Ubisoft at its zenith, you’d find yourself with a mere $150 now.

As for its ongoing fiscal year, it hasn’t been much better, suffering from dismal financial outcomes due to games failing to meet internal goals, rising production expenses, cancellations, and delays. Years of poor oversight, excessive spending, and a general disconnect from the gaming industry have positioned Ubisoft at a critical juncture. Regrettably, it will ultimately be the developers who face the repercussions, and with Ubisoft’s fate apparently resting on just one AAA title, Assassin’s Creed Shadows, we may not have to wait long to witness how events unfold.

Acquisition Discussions

It has been extensively reported that Ubisoft is in discussions with advisors regarding methods to stabilize the enterprise, with recent updates indicating that Tencent was on the verge of acquiring the company and privatizing it. However, these discussions seem to have stalled, as a significant aspect of the negotiations centered on the Guillemot brothers’ insistence on maintaining control, a condition that Tencent likely wouldn’t wish to accept. After all, the Guillemot brothers essentially placed Ubisoft in this situation initially.

For the time being, the pause in negotiations appears to be a tactic employed by both parties. Tencent will continue to acquire shares and increase its holdings. Simultaneously, the Guillemot brothers likely intend to wait until late February to early March to resume talks, as Ubisoft plans to launch the highly awaited Assassin’s Creed Shadows on February 14. Should Assassin’s Creed Shadows fail, it would provide Tencent further opportunities to enhance its ownership at a lower share value. On the flip side, a successful debut would afford the Guillemot brothers greater bargaining power going into subsequent discussions.

From what I gather, this maneuver may favor the Guillemot brothers more. According to various sources within Ubisoft, pre-orders for the game were robust prior to its postponement and still appear strong, even if they remain behind that of Assassin’s Creed Valhalla (which was available on both previous and current generation consoles at the time). Assassin’s Creed Shadows seems to represent Ubisoft’s last significant chance, and even if the game performs exceptionally well, it does not guarantee that Ubisoft is in the clear.

Hell of Mismanagement

Ubisoft and mismanagement are inseparable; you cannot have one without the other. In recent years, I’ve chronicled numerous projects that have faced mismanagement challenges, and it appears that this will persist outwardly. Primarily, it boils down to the personal relationships and familial ties among upper management, with individuals looking out for one another at the expense of countless disgruntled developers.

The most notable projects that have struggled include Ubisoft’s self-styled AAAA title Skull & Bones and Beyond Good and Evil 2, with the latter still lacking a public release date despite the announcement being made 16 years ago. Beyond these more well-known titles, the mismanagement within the organization has resulted in numerous projects being canceled or stuck in a perplexing stage of development with no resolution in sight. One remarkable game, codenamed Project U, has recently returned to the drawing board after five years of development, with its budget dramatically inflating. A developer linked to the project mentioned they wouldn’t be surprised if costs had already surged past the $100M threshold.

XDefiant, regarded as one of the most promising free-to-play shooters at Ubisoft and in the industry for the past ten years, launched poorly due to the same mismanagement issues and top-tier executives only concerned with their own interests. Following the game’s initially strong performance, developers shared that the indicators of impending closure had been apparent for months due to a significant decline in player engagement and spending. The game was incurring millions in development expenses alone — not including initial production costs, server fees, and other expenses — a financial burden that Ubisoft could not manage in its current condition, nor envision a future where it could evolve into a successful title due to its own making.

Ultimately, Ubisoft’s mismanagement poses a significant obstacle for the company as it moves ahead. Despite the board at Ubisoft initiating an inquiry into the organization’s difficulties (notably, five of the members are from the Guillemot family), there is little belief among those I’ve spoken to that it will result in any real transformation. Conversations with both former and current employees at varying levels within the company reveal a strong speculation that CEO Yves Guillemot would choose to sink with the [Skull & Bones] ship rather than relinquish his position, with a similar sentiment echoed regarding the other Guillemot brothers. This is a challenge the company must somehow navigate, regardless of where Assassin’s Creed Shadows ends up, even if it achieves success.

Ubisoft’s recent annual internal survey, which allows employees to provide feedback somewhat anonymously (though I note this is because departments and studios are identifiable), indicates that employee confidence in the organization is alarmingly low. While I lack specific figures for the entire company, some studios reported an overall trust level as low as 15-20% (deliberately vague here).

A Dubious Future

It appears almost unavoidable that at some point during…

In 2025, Ubisoft is set to undergo significant transformations. Transitioning to a private entity appears to be the probable route, but that choice will certainly impact thousands of creators.

Conversely, Ubisoft might opt to weather the turbulence, particularly if Assassin’s Creed Shadows performs as anticipated. However, the organization must reduce the volume of initiatives it is pursuing. It needs to regain players’ confidence, commencing with Shadows; and it has to keep fostering that confidence by first halting the incessant pursuit of trends.

At present, Ubisoft is developing several major titles projected for release by the close of 2026, such as Splinter Cell Remake, Far Cry 7, Assassin’s Creed Shadows, Assassin’s Creed Black Flag Remake, Assassin’s Creed Hexe, Ghost Recon Over, Prince of Persia: Sands of Time Remake, and a handful of other minor projects under prominent intellectual property. The Division 3, a Rayman Remake, another Assassin’s Creed Remake codenamed Stardust, an additional flagship Assassin’s Creed RPG, and Beyond Good and Evil 2 (which is now advancing well) are slated for a later time frame.

Nevertheless, on the contrary, Ubisoft continues to invest heavily in Project U, Project Scout (another Battle Royale significantly influenced by Apex Legends), Project Maverick (a Far Cry extraction-themed shooter), NFT games, and numerous other titles that practically anyone with sound judgment would assert are unlikely to yield a return on investment. To clarify, I am not suggesting that Ubisoft should cease exploring “new” concepts (the Animal Crossing-inspired ALTERRA currently in development at Ubisoft appears stunning to me), but certain projects seem so evidently doomed to fail, that it’s astonishing the company persists in spending hundreds of millions of dollars annually, which they lack, on projects with the hopes of discovering the next Fortnite.

Ubisoft is unquestionably at a pivotal moment. Regardless of the path taken, modifications need to be made at the highest level for it to thrive.

What do you predict will occur with Ubisoft in 2025? Share your thoughts in the comments or engage in the conversation on our community forum!

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