If yesterday’s Ubisoft announcements of cancellations and studio restructuring and promises to focus on gen-AI were intended to win back shareholder confidence, it’s safe to say that’s not really worked out. At the start of trading today, the publisher’s share price dropped to its lowest level in 14 years, a third of their value wiped out overnight, and that’s after years of colossal falls. In fact, an Ubisoft share bought in June 2018 has now dropped in value by more than 95 percent.
Yesterday, on announcing the cancellation of projects like the Prince of Persia: Sands of Time remake alongside other unannounced titles, and a plan to restructure its development studios yet again (in other words, close more of them and fire many more staff), Ubisoft described these actions as introducing “a radically new value-creation model.” It’s certainly proven radical.
A lengthy statement laid out how Ubisoft plans to redesign its entire structure and “simplify” its operations, all with a goal to create “efficiency” and convince investors that the company is going to stop hemorrhaging money. The plan promised to focus its attentions on turning its established IPs into “annual billionaire brands” while directing its attention toward all of last year’s buzz-words like live-service and “Gen-AI initiatives.” It appears that simply stating that the games that currently don’t make close to a billion dollars a year will now start doing so hasn’t convinced shareholders of the company’s future.
At the time of writing, a share in Ubisoft is wavering around $4.30, down from $6.60 yesterday. That’s down from a peak of $13.40 last year, and an astonishing drop from 2018’s all-time peak of $95. Things had still looked hopeful in January 2021 when prices climbed back up to around $83, but it’s been a steep, sharp slope downward since then. This has all occurred alongside the repeated cancellation of major projects, and wave after wave of firings of its employees at studios all around the world.
This endless deckchair rearrangement doesn’t appear to be fooling anyone with money invested in the publisher, and each move has seen prices tumble in response. This morning’s market reaction to yesterday’s latest raft of bold plans could be the sharpest drop the company has ever seen, unless there’s a skin-of-their-teeth bounce-back later in the morning.
Still, if you were looking to sell your brand to a private owner, as EA is currently attempting, being this colossally incompetent would sure make you look a lot cheaper to interested buyers.
