Video games: attack Ubisoft amidst the chaos
Calls for an unprecedented strike by all its staff in France, stock market crash, canceled games… French video game giant Ubisoft has been in a lot of crises since the announcement, in mid-January, of a reduction in its financial forecast for the full fiscal year 2022- 2023.
The video game workers’ union (STJV) and Solidaires Informatique have launched a “call to strike” by all French entities Ubisoft this Friday from 14.00 to 18.00, to denounce management’s managerial practices. .
In memory of a unionist, this was the “first” strike of such magnitude in the history of Ubisoft, since the creation, in 1986, of the publisher at the start of the “Assassin’s Creed” series, underlined Marc Rutschlé, section union representative at Solidaires Informatique. These demand moves are quite rare in the video game industry, most recently marked by a five-week strike by publisher Activision Blizzard employees, in late 2021, which resulted last May in the formation of the first union in corporate America.
What is burning powder in Ubisoft? The internal email sent by the CEO, Yves Guillemot, refers to the upcoming “structural adjustment” while Ubisoft has committed to the market to achieve 200 million euros in savings over two years. “For us, that meant a redundancy plan. And when we talk about saving, that means laying off people and not increasing the salaries of those who stay. Knowing that we are being pressured by saying it’s up to you to do better “, criticized Marc Rutschlé. In their press release, the unions specifically demanded “open wage negotiations”.
The harassment scandal that targeted some former executives of the company, which has 18,000 employees worldwide, during the summer of 2020 also left its mark, eroding employees’ trust in their management. “At the time of the takeover attempt by Vivendi (in 2015), the team was mobilized to prevent Bolloré from buying Ubisoft. If that had happened today, I don’t think there would have been any mobilization,” said Marc Rutschlé.
Sales expected to drop more than 10%
On the financial level, the French publisher has also fallen badly on the stock market since the announcement, in mid-January, of a reduction in the financial forecast for the entire 2022-2023 financial year, due to the context of “deteriorating macroeconomic conditions”. Ubisoft has revised its revenue growth target for 2022- 2023 onwards, with sales down “more than 10%” compared to the previous year, while having initially communicated a “greater than 10%” growth target.
“We are baffled by the level of difficulty Ubisoft is facing”, reacted in a note. Emmanuel Matot, financial analyst at Oddo BHF, downgraded his recommendation on the title from “better performance” to “neutral”. “Ubisoft isn’t convincing,” explained Charles-Louis Planade, stock market analyst and investment bank Midcap Partners. “There was clear mistrust at management level, given the many warnings on the results but also by Agreed produced by the Guillemot family with Tencent”. The founders of French video game champs, the Guillemot family, forged an alliance with Chinese giant Tencent in early September to secure their grip on Ubisoft, in the video game market in full consolidation.
Another element working against it: the umpteenth delay of the game “Skull and Bones”, originally slated for November 2022, while Ubisoft also indicated that it had halted development of three projects “without notice”, in addition to the four already announced stops. July 2022. “This is not a unique case in this sector, particularly due to Covid, but we have the impression that at Ubisoft this is much more prominent than at other publishers”, underlined Charles-Louis Planade. “After that, we must not forget that market memory is short. If the group releases a great year next year or the next, everyone will forget. »
