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Cancellation of several games and call for a strike: but how did Ubisoft find itself in such a mess?

Call for an unprecedented strike by all of its staff in France, stock market crash, canceled games… The French video game giant Ubisoft has been experiencing a multiple crisis since the announcement in mid-January of the lowering of its financial forecasts for the fiscal year 2022-2023.

The union of video game workers (STJV) and Solidaires Informatique called for a strike by all French entities of Ubisoft on Friday afternoon to denounce the managerial practices of management.

From the memory of a trade unionist, it is the “first” strike of such magnitude in the history of Ubisoft since the creation in 1986 of the publisher behind the series Assassin’s Creedunderlines with AFP Marc Rutschlé, representative of union section at Solidaires Informatique.

From union sources, “at least 100 people” went on strike at the Ubisoft Paris Studio site in Montreuil (Seine-Saint-Denis), while a rally was also planned in front of the Montpellier studio. “For us, it’s a success. The message is clear for management”, emphasizes Marc Rutschlé. Contacted by AFP, management declined to comment.

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This demand movement is quite rare in the video game industry, recently marked by the five-week strike at the end of 2021 by the employees of the publisher Activision Blizzard, which resulted last May in the creation of the first union within the American company.

What set fire to the powder at Ubisoft? An internal email sent by CEO Yves Guillemot, referring to “structural adjustments” to come when Ubisoft has made a commitment to the markets to achieve 200 million euros in savings over two years. “For us, that means redundancy plans. And when we talk about saving money, that means firing 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’”criticizes the representative of Solidaires Informatique.

In their press release calling for a strike, the unions demand in particular “the opening of wage negotiations”.

The strategy “does not convince”

On the financial level, the French publisher has also fallen heavily on the stock market since the announcement in mid-January of the lowering of its financial forecasts for the entire 2022-2023 financial year, in a context of “deteriorating macroeconomic conditions”.

Ubisoft has revised its revenue growth target for 2022-2023 downwards, with reduced sales “more than 10%” compared to the previous year, when it had initially communicated a growth objective “greater than 10%”. Consequence: its share price returned to its lowest levels of 2015-2016. It ended Friday at 19.16 euros, up +1.75%.

“We are confused by the extent of the difficulties encountered by Ubisoft”reacted in a note Emmanuel Matot, financial analyst at Oddo BHF.

“Ubisoft does not convince”explains to AFP Charles-Louis Planade, analyst at Midcap Partners. “There is a clear distrust at the management level, given the many warnings on the results but also by the deal made by the Guillemot family with Tencent.”

The founders of the French video game champion – the Guillemot family – sealed an alliance with the Chinese giant Tencent in early September to secure their hold on Ubisoft, in a video game market in full consolidation.

Another element against him: the umpteenth postponement of the game Skull and Bonesoriginally scheduled for November 2022, while Ubisoft also said it has halted development on three projects “unannounced”in addition to the four shutdowns already announced in July 2022

“This is not a unique case in the sector, in particular because of Covid-19, but we have the impression that at Ubisoft, it is much more marked than at other publishers”emphasizes Charles-Louis Planade. “Afterwards, we must not forget that the memory of the market is short. If the group releases an extraordinary year next year or the year after, everyone will have forgotten”he adds.




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