Ubisoft: strike, canceled games… Why the video game giant is in the midst of a storm

Ubisoft: strike, canceled games… Why the video game giant is in the midst of a storm

It was an internal email, sent by the CEO of Ubisoft Yves Guillemot, which set fire to the powder. He evokes “structural adjustments” to come as the company has made a commitment to the markets to achieve 200 million euros in savings over two years. The French video game giant, which has 18,000 employees worldwide and is present in around fifty countries, has been going through a multiple crisis since the announcement in mid-January of the lowering of its financial forecasts for the entire fiscal year 2022-2023, due to a context of “deteriorating macroeconomic conditions”.

“We are clearly disappointed with our recent performance. We face contrasting market dynamics as the industry continues to shift towards mega-brands and live games,” Yves Guillemot said in a statement.

The union of video game workers (STJV) and Solidaires Informatique have launched a “call for a strike” by all French entities of Ubisoft, this Friday, January 27 from 2 p.m. to 6 p.m., in order to denounce the managerial practices of management. From a union source, “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,” said AFP Marc Rutschlé, union section representative at Solidaires Informatique.

This call for a strike at the French jewel of video games, taken following “the last meetings with the management of Ubisoft” according to the two unions, aims to denounce “the absurdity of the conditions of production of the games and the way in which our colleagues and our comrades are treated as weights and burdens that should be rid of,” they said in a statement on Monday January 23.

Unions demand “the opening of wage negotiations”

“The management of our company continues to question the work carried out without ever considering the possibility of its own failures and blindness”, they added, demanding in particular “the opening of salary negotiations” with the aim of obtaining revaluations “up to at least inflation, independent of increases”.

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 at the origin of the series. Assassin’s Creed, emphasizes Marc Rutschlé. This protest movement is quite rare in the video game industry, recently marked by the five-week strike by publisher Activision Blizzard employees at the end of 2021, which resulted in the creation of the first union in May 2022. American company.

“For us, that means redundancy plans. And when we talk about saving money, that means firing people and not raising the salaries of those who stay. Knowing that we are being pressured by saying: ‘ it’s up to you to do better'”, castigates Marc Rutschlé. In their press release, the unions demand in particular “the opening of wage negotiations”.

A reputation tarnished by a sexual harassment scandal

A sexual harassment scandal targeting several former executives of the company, during the summer of 2020, also left its mark, eroding the confidence of employees in their management and shaking a group that wanted to be inclusive.

Multiple testimonies from employees and former employees of the group then denounced harassment targeting several of its executives. Consequences: several leaders of the group have been pushed out or resigned, including the number two of the group, Serge Hascoët, head of creation at Ubisoft for 20 years, as well as the director of human resources and the boss of Canadian studios .

The company then launched several internal investigations, promising to profoundly change its corporate culture in order to offer “a safe working environment”, according to its boss, Yves Guillemot.

The share price returns to its lowest levels

Financially, the French publisher has also fallen heavily on the stock market since mid-January. Ubisoft has revised its revenue growth target for 2022-2023 downwards, with sales down “by more than 10%” compared to the previous year, when it had initially communicated a target of growth “greater than 10%”. As a result, its share price returned to its 2015-2016 lows.

“We are confused by the extent of the difficulties encountered by Ubisoft”, reacted in a note Emmanuel Matot, financial analyst at Oddo BHF, downgrading his recommendation on the title from “outperformance” to “neutral”. “Ubisoft does not convince”, explains 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 2022 to secure their hold on Ubisoft, in a video game market in full consolidation.

Another element against him: the sixth postponement of the game Skull and Bonesoriginally scheduled for November 2022, while Ubisoft also said it had halted development on three “unannounced” projects, 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”, affirms Charles-Louis Planade. “Afterwards, we must not forget that the market’s memory 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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