After spending hours on two long-form articles on this, I don’t think this ends well.
A 33% drop to €4.36 reflects deeper issues: canceled projects, restructuring chaos, debt pressure, and an overreliance on open-world and AI?. This is what loss of confidence looks like.

The timing lines up closely with a covenant breach and emergency debt repayment, not just a creative reset.

“In-person collaboration” isn’t what fixes productivity when the company breached debt covenants, had to restate €258.7M of EBITDA, and used Tencent money to stabilize lenders.

This looks less like creativity policy and more like cost control and leverage during restructuring.

15/
Sources: Ubisoft H1 FY26 earnings (Nov 21), Bloomberg, Reuters, Game File, Insider Gaming.
The breach is documented fact. The timeline is documented fact.

Everything else follows from the math.

14/
Bottom line:
The covenant breach explains the urgency, the timing, and the severity of Ubisoft’s actions.

This wasn’t sudden. It was delayed disclosure meeting financial reality.

13/
Governance matters here.
Ubisoft has had the same CEO for 37 years, presided over an 85% stock decline, a harassment scandal, mounting debt, and now a covenant breach.

The Tencent deal preserved family control while diluting shareholders.

12/
Employees reportedly learned about cancellations and closures via media, not internally.
Layoffs were pre-announced weeks in advance with no details.

This may be legal. It’s still a management choice.

11/
The Halifax studio closed 20 days after unionizing.
Ubisoft was asked to show the closure decision predated the union vote.
They declined to provide documentation.

That refusal matters, regardless of legal outcome.

10/
Prince of Persia was restarted twice over five years before being canceled.
If quality alone were the issue, it could have been killed years earlier.

The financial context explains why it died now.

9/
This reframes Jan 21.
It wasn’t just “portfolio optimization.”
It was cost-cutting under covenant pressure while emergency capital cleared.

Projects without near-term revenue were the first to go.

8/
Here’s the timing most people missed:

• Sept 30: covenant breached
• Nov 13: trading halt before earnings
• Nov 21: restated earnings + breach disclosed
• Dec–Jan: “portfolio review”
• Jan 21: game cancellations, closures, layoffs announced

7/
Bloomberg and Reuters confirmed Ubisoft would use Tencent’s €1.16B investment to repay that debt early.

The Tencent deal didn’t fund growth first.
It stabilized lenders.

6/
Once the covenant was breached, lenders could have demanded immediate repayment.
About €286M in loans (Term Loan + Schuldschein) were exposed.

This is standard covenant math. No drama. Just contract

5/
Why the restatement?
New auditors (hired July 2025) forced Ubisoft to reclassify partnership revenue under IFRS 15—recognizing it over time instead of upfront.

Ubisoft hasn’t disclosed which partnerships were affected.

4/
What changed wasn’t debt. It was earnings.
EBITDA was restated from €910.4M to €651.7M (–€258.7M).
Equity also fell ~€85M.
The EBITDA hit alone was enough to break the covenant.

3/
Before an IFRS restatement, Ubisoft reported:
Net Debt / EBITDA: 1.30 (limit 1.50) → compliant
After restatement:
Net Debt / EBITDA: 1.81 → breach

That’s ~20% over the limit. A default trigger.