Ubisoft Investors Grill CEO, CFO on Potential Tencent Sale, Delays, and Financial Woes

Ubisoft just delayed the release of Assassin’s Creed: Shadows by another monthamid challenging financials, ongoing cost cuts and ongoing rumors, the company is preparing to be sold to gaming giant Tencent. In an emergency conference call today, investors pressed CEO Yves Guillemot and CFO Frederic Duguay for answers to all of the above, but their responses offered little reassurance.

Ubisoft’s call today came with not only an announcement of a delay, but also a confirmation of sorts that Ubisoft is preparing for a sale, or at least seriously considering the possibility. According to a press release, the company has “appointed leading consultants to review and implement various strategic and capital transformation options to maximize stakeholder benefits. This process will be controlled by independent members of the board of directors. Ubisoft will inform the market.” in accordance with the applicable rules, if and as soon as the transaction occurs.”

Back in October Bloomberg reported this. that Ubisoft’s founding family, Guillemot, and shareholder Tencent were discussing taking the company private after a series of high-profile failures, game cancellations and falling share prices. Negotiations were only preliminary at the time, and Ubisoft told IGN it would “inform the market if and when necessary.” Today’s news seems to suggest that such talks, either with Tencent or in some other capacity, have moved forward in some way.

But it’s unclear exactly how, and Ubisoft shareholders were understandably keen to get more details during today’s conference call. But Guillemot and Duguay did not bite. First, they were asked directly by a Morgan Stanley representative: “In terms of the various strategic and capitalist options for transformation, that’s a bit of a vague phrase, if you don’t mind me saying. And perhaps in particular, there have been press reports about detailed discussions with Tencent that were reported in December. Should we read that there is now some proposal that the independent board members are going to consider against other options? Isn’t that what you mean?”

Duguay replied:

The goal of this process is to unlock the maximum potential of our assets for the benefit of our stakeholders and create the best conditions for creating great games in a rapidly evolving market. This is a common goal, which is why we mentioned that we have appointed lead advisors. Therefore, we are now actively considering different options. And we can’t say more. Of course, we won’t comment on specific rumors we’ve seen in the market, but we are convinced that there are several potential ways to profit from Ubisoft’s assets and franchises. We will let the market know if and when the deal goes through.

This… doesn’t clear anything up! And the Morgan Stanley guy seemed to feel the same way, because he went on to admit that Ubisoft didn’t want to say what the various options were, but asked if they could say “if there are any specific actions or scenarios that are being discussed ” being considered, or is it more of an exploratory process?” clarifying that he wanted to know how this announcement differed from Ubisoft’s past statements about such research.

Duguay’s answer was brief. “We are limited in what we can say today, but we have begun the process.” It would then seem that this realization could be interpreted as an overly specific confirmation added “with advisors.”

Other shareholders didn’t let Ubisoft off the hook. A Barclays representative indicated to Guillemot and Duguay that Tencent was recently designated by the US as a Chinese military company.and wanted to know if this would prevent her from becoming the majority owner of Ubisoft. Guillemot declined to comment. An HSBC representative asked what stage the consultants were at and when Guillemot could expect to see the first results. Guillemot said only that they had “started working” and could expect “good progress” in the coming months.

True, Guillemot and Duguay are not so much. Maybe talk about a potential acquisition without putting it in legal or negotiating jeopardy, but that doesn’t mean skepticism around the board’s purported plans wasn’t justified. A number of other questions went unanswered during the call, such as how many AAA games Ubisoft plans to release in the next fiscal year (“you’ll know more by May”) and what kind of feedback Ubisoft received that prompted it. a month-long delay in the release of Assassin’s Creed: Shadows (Duguet and Guillemot teamed up on a response about the positive sentiment of the community, which did not answer the real investor question at all).

Overall, the tone of the discussion expressed serious concern for the health of Ubisoft and shareholder investments, and it’s not surprising why. For several years now, Ubisoft seems to have been in a strange, slow downward spiral, with a number of high-profile failures, layoffs, studio closure, Game cancellations and delay after delay after delay.

Meanwhile, rumors continue to circulate about what proposals the board of directors is considering, and some media outlets have expressed the opinion that Tencent increasingly refuses to cooperate with Ubisoft due to the Guillemot family’s insistence on maintaining a significant degree of control. Besides Tencent, there are few other companies big and rich enough to spend the money needed to save the albatross that Ubisoft has become.

Rebecca Valentine is a senior reporter at IGN. You can find her post on BlueSky @duckvalentin.bsky.social. Have a story tip? Send it to rvalentin@ign.com.