Ubisoft is reportedly facing big changes inside the company. Due to falling stock prices and recent game flops, the Guillemot family, who started the company in 1986, is reportedly is reportedly in talks with Chinese tech giant Tencent to take Ubisoft private.

Why it matters: With its big franchises not doing well and rising internal tensions, the company will need to take strong actions to get back on track in the industry.
Ubisoft’s stock fell after the Assassin’s Creed Shadows delay.
Bloomberg reports that Ubisoft’s stock price has dropped by 54% this year, leading the Guillemot family to talk with Tencent about possible options to regain control and turn things around.

While these discussions are ongoing, there’s no certainty that a buyout will happen. A review of the company’s strategy is also underway, which might result in different outcomes.

Tencent, which owns 9.2% of Ubisoft, is reportedly working with the Guillemot family, who control 20.5%, to consider taking the company private. If this plan goes ahead, they will buy out the remaining public shareholders, allowing Ubisoft to operate without the pressures of the stock market.

Bloomberg’s report suggests that both sides are seriously looking at this option as a way to restructure and help Ubisoft return to profitability.
The company’s CEO blamed gamers for poor sales of Star Wars Outlaws.
The past year has been very tough for Ubisoft’s game lineup. Two major releases, Skull and Bones and Star Wars Outlaws did not meet sales expectations.

These high-profile failures hurt Ubisoft’s finances, leading the company to miss its revenue goals in the second quarter.

If Ubisoft goes private, it could give the company the space it needs to change its business strategy. Without the stress of quarterly earnings reports and shareholder demands, Ubisoft could focus more on long-term creative projects.

This could be a turning point for the company, helping it recover from recent challenges. However, the way forward is still unclear.

Even with the potential advantages of going private, there are risks to consider. Restructuring a large company like Ubisoft, which has over 19,000 employees worldwide, is a challenging task.

In the end, whether the Guillemot family and Tencent choose to take Ubisoft private or not, one thing is certain: the company is a total mess right now.