Ubisoft has appointed advisors to assess strategic opportunities, potentially signaling a buyout deal, according to an announcement on Thursday.
The company stated, “Leading advisors have been appointed to review transformative options to maximize value for stakeholders.”
Ubisoft also revealed another delay for its much-anticipated game, Assassin’s Creed Shadows, now set to release on 20 March. The postponement, initially from November to February, reflects Ubisoft’s focus on improving gameplay quality and delivering engaging Day-1 experiences.
Tencent’s Possible Takeover
The decision to engage advisors follows reports from October suggesting Tencent and the Guillemot family might privatize Ubisoft.
Tencent, China’s largest social platform and gaming giant, currently owns a 9.99% stake in Ubisoft. The company secured this stake after acquiring 49.9% of shares in Guillemot Brothers Ltd., allowing the Guillemot family to retain governance control.
According to agreements, Tencent cannot sell its shares for five years. However, Ubisoft’s recent statement hints at potential progress with Tencent or other interested parties regarding a takeover deal.
The company emphasized, “The process is being overseen by independent Board of Directors members. Ubisoft will announce any materialized transaction as per regulations.”
CEO Yves Guillemot and CFO Frederick Duguet remained tight-lipped on further details. Duguet remarked, “We are actively exploring options but cannot share more at this stage.”
Financial Struggles and Downgraded Guidance
Ubisoft has faced a challenging financial year, with revenue and profit margins declining sharply in the September quarter. Its stock fell 44% in 2024, hitting a decade-low in early October after weaker-than-expected results forced a full-year outlook revision.
In Thursday’s announcement, Ubisoft further downgraded its fiscal guidance. The company now projects net bookings of €300 million for the third quarter, down from €380 million, citing disappointing holiday sales of Star Wars Outlaws and the cancellation of XDefiant.
Full-year bookings expectations for fiscal 2025 dropped to €1.9 billion, compared to the previous forecast of €1.95 billion set in September. This marks a significant decline from fiscal 2024’s €2.3 billion.
Ubisoft attributed the revisions to decisions regarding Assassin’s Creed Shadows and underwhelming launches of Star Wars Outlaws, which failed to meet projections.
The company reported net bookings of €642 million in the first half of fiscal 2025, a 22% drop year-over-year, with disappointing performances from new releases. Additionally, Ubisoft recorded a negative free cash flow of €126 million.
In response, Ubisoft announced significant cost-reduction measures. “We aim to exceed €200 million in fixed cost reductions by FY2025-26 compared to FY2022-23,” the company stated.
Despite these challenges, Ubisoft remains committed to adapting its strategy and navigating the gaming industry’s evolving landscape.
