Ubisoft has explained that they are putting themselves through a board review.
In their latest financials press release, Yves Guillemot made this announcement. In his own words:
“Although the tangible benefits of the Company’s transformation are taking longer than anticipated to materialize, we keep on our strategy, focusing on two key verticals – Open World Adventures and GaaS-native experiences – with the objective to drive growth, recurrence and robust free cash flow generation in our business.
In the light of recent challenges, we acknowledge the need for greater efficiency while delighting players. As a result, beyond the first important short-term actions undertaken, the Executive Committee, under the supervision of the Board of Directors, is launching a review aimed at further improving our execution, notably in this player-centric approach, and accelerating our strategic path towards a higher performing model to the benefit of our stakeholders and shareholders.”
To be clear, this was not a random choice by the company to investigate themselves. Board reviews, also called board evaluations, are a formal business practice that companies can use to evaluate their business.
We know the video game industry does this sort of thing already, in the form of periodic internal evaluations. For example, these companies may choose to do evaluations annually or every few years, to assess how well their staff are doing their job, and that can guide decisions as serious as who gets laid off and who gets promoted.
In the past two years, we had been reporting on layoffs in the video game industry. When we report using terms like consolidation, these internal reviews are part of that process. However, Yves very clearly stated that their future board review will be undertaken by their Ubisoft’s Executive Committee, and supervised by their board of directors.
That’s because Ubisoft’s investigation will also involve Yves himself, the rest of the Guillemots and basically everyone else in charge of the company. That includes the board members too, but Yves explained the pending investigation for a specific reason.
Earlier this month, a minority shareholder made damning accusations of the Guillemots and fellow shareholder Tencent, colluding so they could get control of the company back. This minority shareholder wants Ubisoft to go private, change its leadership, and possibly even get new investors. This is all to ensure that Ubisoft’s leadership holds themselves accountable.
While we don’t know how accurate those accusations were, it’s clear that it rattled the company. Ubisoft’s leadership now has to show their shareholders that they are running the company the best they can, and display they can hold themselves accountable.
And that’s what makes Yves’ announcement interesting. He also said he would share the details in their next financial results announcement this October 30, 2024. The Guillemots may try to convince shareholders that they can do this review on the level, but it’s also possible that Ubisoft will get an independent external assessment from a third party.
These details don’t directly affect the immediate and short term future of Ubisoft’s games. But we are now looking at a scenario where the Guillemots could sell and leave Ubisoft. Even if they end up remaining their own company, a new Ubisoft without the Guillemots will send shockwaves across the industry.
It can certainly rival Microsoft’s acquisition of Activision Blizzard as the biggest event in the industry for this console generation. Somehow, there are new exciting things to look forward to in video games, that aren’t video games.
