Ubisoft's recent cost-cutting measures and restructuring have sparked debate among analysts and industry experts. The French publisher's move to create five separate 'creative houses' under which its various franchises will live has raised questions about the company's ability to achieve 'sustainable growth'.
Ubisoft founder and CEO Yves Guillemot claims the restructure is part of the company's plan to return to sustainable growth over time. However, analysts and industry experts have differing opinions. David Cole, founder and analyst at DFC Intelligence, suggests that 'sustainable growth' is a broad term that can mean different things to different companies. Michael Futter, a video game consultant at F-Squared, argues that the term is often misused, as public companies prioritize shareholders over business sustainability.
Joost van Dreunen, an investor and New York University professor, believes that Ubisoft's dramatic overhaul is necessary after a series of struggles. He compares Ubisoft's market value to Take-Two's, noting the former's potential for selective divestitures, privatization, or acquisition. Amanda Farough, co-founder of F-Square, agrees, suggesting that Ubisoft's fragmentation is a way to secure funding from Tencent.
Cole explains that Ubisoft's restructuring reflects a broader industry reality, where publishers are under pressure to reduce fixed overhead and improve execution. He predicts a shift towards a more modular development model, similar to film and television production. This approach allows third parties to invest in specific franchises while leaving other parts of the company untouched.
However, some industry experts argue that the creative houses structure is essentially pre-packaging Ubisoft for sale. Van Dreunen suggests that Ubisoft's franchises are easier to sell off, with autonomous divisions making it easier for acquirers to cherry-pick valuable parts. This could lead to an exodus of senior talent, benefiting Europe and North America's indie scene.
Ubisoft's employees are not convinced by the company's plans. A recent Town Hall meeting did not reassure workers, who are incensed by the restructuring and its impact on games, studios, and employees. Some employees have called for Guillemot's resignation, and five unions are encouraging staff to strike from February 10 to 12.
Despite the controversy, Ubisoft's restructuring aims to provide focus and efficiencies, mitigate risk, and revitalize internal processes. The company's ability to achieve sustainable growth remains uncertain, but the debate continues among industry experts and analysts.
