Ubisoft’s Big Miss Explained

[Music] All right, Chris, I am I am really Let me get my popcorn ready. I am super excited. Oh, actually, first, let me just do a quick update on Ubisoft's first quarter earnings report just to set you up for your rant. So, sadly for them, their earnings were below expectations. I'm not sure we're shocked by this. They attributed this to lower than expected performance for Rainbow Six Siege. I think there was some issue with payments that they have since figured out. They also blamed an unfavorable foreign exchange rate. Oh, shocking. You know, they always do that. And good for them. It's back catalog and net bookings were up 4% versus the same period a year ago. And then this is the part I kick it to you. A partnership that is now expected to materialize in Q2. Chris, tell me more about the partnership.
It's ridiculous. Absolutely ridiculous. The biggest thing that they just did not really cover on this as much and they

did a little bit on the earnings is that Assassin's Creed did well but it didn't do well.
So I mean they said 5 million concurrent like that's not a good number for a game that big and part of it obviously because they moved it out of holiday which cut it by 40% just from the get-go, right? But also there's a little bit of fatigue on the same game over and over again. So anyway, they also announced this. Oh my god, I I I literally lost my goddamn mind. And so I had to post almost immediately to LinkedIn on this thing because this is exactly what I was talking about. This deal with 10 cent gives them absolute cart blanc to do whatever the [ __ ] they want. And so what they did was they put his son and his cousin in charge of some of the three biggest IPs in the world, right? And his son was a discredited, disgraced. He was kicked out of the company. Like, and

he's never made a successful game in his goddamn life, right? And now he's in charge of three of the biggest IPs in the world. It is insane. It is insane. And this is exactly what I've been talking about this whole time. And I don't like to say I told you so, but this is [ __ ] up, right? Like he's maintaining his family power by doing these deals and it's not good for shareholders. It's not good for employees. It's not good for their franchises. It's just not good for the industry as a whole. It's like this absolute uncheck control. So, I wrote an article on LinkedIn responding to this [ __ ] PR thing with a bunch of smiley [ __ ] bases that they all have a job that's getting subsidized by the Chinese and that they are still being run by the same [ __ ] up family that has been [ __ ] up for like a decade, right? And so, here is the article. At what point does family led just mean family destroyed? Ubisoft has spent the past decade in continuous decline while the Gilamont family clings to power like it's 2007. Here's the highlight reel

that investors could not stand. Right. Creative decay, Assassin's Creed, Far Cry, Ghost Recon. Once AAA, now Formulaic, noble new IPs have stuck in years. Cultural rot. Multiple executives ousted in 2020 amid serious abuse allegations which were true. The company promised change. Very little has actually changed. Operational chaos. projects endlessly rebooted or shelves. Skull and Bones has had more lives than Ubisoft and NFTTS. Strategy roulette, VR, web 3, battle royale, mo mobile, toys to life. Ubisoft had dabbled in every [ __ ] trend without ever succeeding or committing to any for that matter. Ultimately, all this resulted in financial underperformance, declining margins, weak pipeline, and a talent exodus. And now the 2025 kicker is that Tencent invests in this new Ubisoft adjacent studio which is now run by the CEO Eve's son and cousin. Nepotism meets shareholder delution. This isn't innovation. It's entrenchment. This

isn't a turnaround story. It's a case study in why unchecked family control erodess long-term value. There is a real talent buried inside Ubisoft and absolutely amazing IP. But as long as governance is a family affair, investors should expect more of the same. Missed trends, missed earnings, and missed opportunities, it's time for Eve Gilmont to let go and for a season independent operator to rebuild this once great publisher before it becomes entirely irrelevant. All right, that was the post. So, after a bit of uh soularching and trying to calm the [ __ ] down and talking to a few bunch of people, so here's what I think is going to happen. All right, this this is why I was so in in sense, right? First, choosing Charlie to head this new company is so wrong in so many ways. First of all, he's 33 [ __ ] years old, right? He's a [ __ ] child. All right, first of all, right? He's barely out of diapers, right? He's never released a successful game in his life, right? He has no experience running big teams. He's been working on small

projects since the beginning. But the big thing here is that you have to keep in mind that having him in charge, there is no self-respecting studio lead or GM that would ever work for this guy, right? So that's the type of people that they need, but they can't get people like that because they're not working for some baby that's like put up there because of [ __ ] nepotism, right? So likely what they're going to have is these like French yesmen in charge, right? They're going to put them in place because they're the only people that will actually cowtow to a 33 year old child, right? Or hire more family, right? But ultimately, they're not going to have the right people in charge to actually get [ __ ] done, right? So, anybody that's talented with ambition or drive within this company is not going to be rewarded. And this is like the culture that they've created by all this [ __ ] [ __ ] nepotism, right? And second, you know, obviously Christopher, who's his cousin, right, who's been there for 25 years, probably has never actually ever like pushed anything

against Eve, right? So, he was probably put there as co-CEO because they wanted an adult in the room, right? But he doesn't help at all either, right? Because he's still part of the family that's [ __ ] up this company for the last decade, right? I'm sure Tenset was part of the reason that they have Christopher up there as well. And the big challenge that they have, and this is like from my understanding, is that they don't have any big games until 2027, dude. They have nothing this year. They have nothing next year, dude. Assassin's Creed is out to launch. Ghost Recon is really far behind. Far Cry, I think, is rebooted. Like, there's a lot of things that are going on in this company that are really [ __ ] up. So, we will they basically will have one more shot on goal in like the 2027, maybe 2028 time frame and that's it. And so what I think the big thing here that Tencent is doing is that they are basically giving them enough rope to hang themselves, right? And they're going to pick up the pieces in three to four years and get these IPs for a [ __ ] discount, right? Because there's just no way they're going to be able to execute on this with this type of

leadership team. And so this is again really really bad obviously for Ubisoft, for any of the employees that are still remaining that still are stuck in this quagmire. And it's also bad for the industry. We want more independent publishers that are making great content. It's just really, really, really, really, really, really sad that this is where we're at. And that is the rant for this one.
Wow.
100% agree with you. This just feels sad. And just weeks ago, you were talking about Xbox with the same tone and the same rant.
It's Yeah.
It's just a sad state of the industry when we're looking at these Western publishers crumble and like all the signals are they're not pulling it together.
I want to make something clear here. I think this is self-inflicted, right? I think Activision managed themselves really well up to the point in which they did the dumb acquisition with Microsoft.
EA has managed themselves very well despite all the criticism people put out there. Certainly, Take 2 is in really good shape. Capcom is in good shape, you know, like there's ways of doing this, right? This is self-inflicted. This is not like, oh, blame the environment,

blame the industry. This is not that,
which was obviously in all of the financial calls they tried to make it about that, right? It's not. [Music]