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Paris: Between the call for an unprecedented strike of employees in France, the collapse of the financial value in the stock market, and the cancellation of games… The French video game giant Ubisoft Group has been experiencing a multiple crisis since it announced in the middle of this month that it had lowered its financial forecasts for the entire current year 2022-2023.
The video game industry union and Solidere Informatics issued a strike call to all French entities affiliated with Ubisoft, on Friday between 13:00 GMT and 17:00 GMT, to denounce the policies approved by the group’s management.
A representative of the trade union branch of Solidere Informatics, Mark Rochelle, told AFP that this is the “first time” that a strike of this magnitude has taken place in the history of “Ubisoft” since 1986, the date of the establishment of the company that developed famous video games, including “Assassin’s Creed”.
This demanding movement is rare among the video game sector, which recently witnessed a five-week strike of Activision Blizzard employees at the end of 2021, which resulted last May in the establishment of the first union within the American company.
And what ignited the spark in “Ubisoft” was an internal message sent by the company’s president, Yves Gimo, in which he talked about upcoming “structural modifications” that Ubisoft pledged to make in the markets to achieve an abundance of 200 million euros within two years.
Mark Rochelle said, “For us, this means preparing plans to dismiss employees. And when we talk about achieving abundance, this means dismissing employees and not increasing the salaries of the rest, in light of the pressure exerted on us by saying ‘You must improve your performance’.”
In their statement, trade unionists demanded, in particular, “launching salary negotiations.”
In addition, since the summer of 2020, a harassment scandal has affected former cadres in the company, which includes 18,000 employees in the world, and left its effects on the group, especially by striking the employees’ confidence in their management.
“When trying to buy Ubisoft for a Vivendi account (in 2015), the teams were enlisted to avoid buying Bolloré for Ubisoft. If that day happened, I don’t think any filling of this kind would happen,” Mark Rochelle recalled.
On the financial level, the value of the French company’s shares has also declined significantly on the stock exchange since the announcement in mid-January of lowering its financial forecasts for the entire 2022-2023 fiscal year, due to “deteriorating macroeconomic conditions.”
Ubisoft revised its revenue growth target for 2022-2023 downward, with sales down “more than 10%” compared to the previous year, after initially announcing a “greater than 10%” growth target.
As a result, its share price has returned to its lows of 2015-2016.
“We are perplexed by the extent of the difficulties Ubisoft is facing,” commented financial analyst at Odo BHF Emmanuel Mato, revising his description of the company’s shares, from “outperforming” to “neutral.”
For his part, “Ubisoft’s performance is not convincing,” Charles-Louis Planad, an analyst at Midcap Partners, told AFP, adding, “There is a clear air of mistrust at the management level, given the many warnings about the results but also about the deal concluded by the Gimo family with Tencent”.
The company’s founding family, Gimou, forged an alliance with Chinese giant Tencent in early September to secure control of Ubisoft.
Another unhelpful element for the company was a new postponement of the launch of the “Scal and Bones” game, after it was initially scheduled for November 2022, while Ubisoft also indicated that it had stopped developing three “undeclared” projects, in addition to announcing a halt to launch. Four more games in July 2022.
“This is not a unique case in this sector, especially due to the Covid pandemic, but we have the impression that the matter in Ubisoft is more clear than in other companies,” said Charles-Louis Blancad.
He added, “After that, we must not forget that the memory of the market is short. If the group achieves an exceptional year in the next year or the year after, everyone will have forgotten.”
