Ubisoft is wondering why it hasn't been bought yet

[mongeese]

In context: In the past six months, half a dozen game studios, including Activision Blizzard, Bungie, and Bethesda have been acquired for billions. Everyone is wondering which studio will be next, including Ubisoft and its shareholders. This week the company published its quarterly report with some wording that made it read more like a sales brochure, prompting questions about the company’s intentions.

Ubisoft published its quarterly report on Thursday and its executives held an earnings call with analysts and shareholders afterward. Subtitles in the 10-page report like "Ubisoft’s assets have never been so strong at a time when the value of assets has never been so high" and "The richest pipeline of games in Ubisoft’s history" made it read like a sales brochure, prompting questions about the company’s intentions.

"In a consolidating industry I guess I’m wondering why you guys haven’t had an offer given the embedded value of your IP," analyst Matthew Walker asked. "Is that because in order to be acquired you have to signal that you want to be acquired and that you haven’t done that?"

"We will not speculate on why people would not have made any offer," Ubisoft CFO Frederick Duguet began. “What is interesting --" And here he was interrupted by CEO Yves Guillemot, who said, "If any offer were made, actually."

"We won’t speculate anymore on any potential interest in buying Ubisoft."

"-- Absolutely, so I can’t comment on that any further," Duguet continued. "What we can say is that as we mention we have high-value assets, we have the scale to remain independent and create very meaningful value in the future because we have scale in terms of workforce, as well as engineering, technology, IPs, and strongly engaged communities."

In some ways, Ubisoft is a poison chalice. Its stock fell continuously throughout 2021 and is worth half of what it was a year ago. It’s also plagued by accusations of severe misconduct that the leadership has rebuffed.

But because it’s priced so low, Ubisoft might also be a bargain.

Assassin’s Creed Valhalla just became the first AC game to generate over $1 billion in revenue and both Rainbow Six Extraction and Far Cry 6 have been well received.

If it were to be sold, Microsoft would be the most likely buyer. Since the two struck a deal to bring Ubisoft+ to Xbox Game Pass, speculation about a sale has run rampant. Another potential buyer could be Tencent, which currently holds a 5% stake in the company.

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https://www.techspot.com/news/93474-ubisoft-wondering-why-hasnt-bought.html

 

[winjer]

My guess is that MS and Sony are looking for companies that make games, not NFTs.

 

[Dimitriid]

I think that Microsoft could have gone for Ubisoft first instead of Activision but timing became an issue: Once the decision was made to spend a cool 50 to 100 billion in a gaming company you could have gone for either Activision, Ubisoft or EA.

EA was/is probably valued above what they wanted to spend so between Activision and Ubisoft they probably made the decision *before* most of the allegations against Activision executives and CEO were made but *after* similar ones were made against Ubisoft.

So at the time of starting and committing to those negotiations, Activision was probably a less immediate legal liability vs Ubisoft. Now they're worst/about the same but well offers were probably made and deals were set so might as well move forward.

 

[Austinturner]

I think that Microsoft could have gone for Ubisoft first instead of Activision but timing became an issue: Once the decision was made to spend a cool 50 to 100 billion in a gaming company you could have gone for either Activision, Ubisoft or EA.

EA was/is probably valued above what they wanted to spend so between Activision and Ubisoft they probably made the decision *before* most of the allegations against Activision executives and CEO were made but *after* similar ones were made against Ubisoft.

So at the time of starting and committing to those negotiations, Activision was probably a less immediate legal liability vs Ubisoft. Now they're worst/about the same but well offers were probably made and deals were set so might as well move forward.

I think you have it the wrong way round, my guess is those allegations made both a better deal, Activisions were more recent and higher profile so they dropped its price and made it cheaper whereas ubisoft’s were fading a bit in the media.

 

[Hexic]

Hah, because even despite Act-Blizz's allegations, it's still worth taking on that risk in acquisition a hundred times over before acquiring a shite studio such as Ubisoft.

 

[Geralt]

Because of their stench of full sh*t nobody is buying them.

 

[winjer]

I think that Microsoft could have gone for Ubisoft first instead of Activision but timing became an issue: Once the decision was made to spend a cool 50 to 100 billion in a gaming company you could have gone for either Activision, Ubisoft or EA.

EA was/is probably valued above what they wanted to spend so between Activision and Ubisoft they probably made the decision *before* most of the allegations against Activision executives and CEO were made but *after* similar ones were made against Ubisoft.

So at the time of starting and committing to those negotiations, Activision was probably a less immediate legal liability vs Ubisoft. Now they're worst/about the same but well offers were probably made and deals were set so might as well move forward.

EA's market cap is just 36b. Almost half that of Activision.
They had so many big flops in recent times, that if it wasn't for Fifa and Madden's money, the company would have already gone under.
Ubisoft is only 6b.
MS could have bought EA and Ubi, instead of Activision and still have a lot of money to spare

 

[Dimitriid]

I think you have it the wrong way round, my guess is those allegations made both a better deal, Activisions were more recent and higher profile so they dropped its price and made it cheaper whereas ubisoft’s were fading a bit in the media.

I think this could also be a possibility but only if MS was confident the discount would be enough to deal with the lawsuits and I'm not convinced given what it sold for but well maybe they made another kind of deal like stating any legal expenses would come out of Activison current stock holders and executives for example so maybe something unique like that.

 

[kamisama]

[QUOTE="EA was/is probably valued above what they wanted to spend so between Activision and Ubisoft they probably made the decision *before* most of the allegations against Activision executives and CEO were made but *after* similar ones were made against Ubisoft.
[/QUOTE]

EA is overvalued but also Battlefield has been failing for 3 times in a row now, people are not that willing anymore to give it another try and be disappointing again.

 

[Shear]

I think that Microsoft could have gone for Ubisoft first instead of Activision but timing became an issue: Once the decision was made to spend a cool 50 to 100 billion in a gaming company you could have gone for either Activision, Ubisoft or EA.

EA was/is probably valued above what they wanted to spend so between Activision and Ubisoft they probably made the decision *before* most of the allegations against Activision executives and CEO were made but *after* similar ones were made against Ubisoft.

So at the time of starting and committing to those negotiations, Activision was probably a less immediate legal liability vs Ubisoft. Now they're worst/about the same but well offers were probably made and deals were set so might as well move forward.

Activ/Bliz is twice as big as EA though. The market cap is like 20b more than EA. The reason they went for Activision is because of the whole scandal that destroyed their value a good bit. It's out now that MS and Activision started talks about purchasing them 3 days after the scandal, which to me just tells me that MS is employing the "buy them when they're weak tactic".

I think EA would have been a good purchase too for them with them having Fifa and all.

As far as Ubisoft though their games have been on the decline. They are making the same game over and over again. And now MS can't really buy another big publisher because FTC is looking at this. If they are saying they will have a deep investigation into this acquisition that MS going and buying Ubisoft on top of it wouldn't make the situation look any better.

Personally, I think nobody wants Ubisoft. They are going through their own drama and they seem to not want to do anything about it almost like "let's just keep it together until someone buys us then it's their problem". On top of that they are pushing NFTs very hard telling gamers they don't understand them and on the other side MS and Phill, in particular, said he has no interest in NFTs and almost implied that he thinks they are "scummy". So I think the contrast between cultures is also a factor.

 

[Nobina]

I have some change I can spare for Ubisoft, but I wouldn't pay more than that.

 

[VaRmeNsI]

Both EA and Ubisoft are dumpster fires.

 

[R00sT3R]

Good luck getting any take over of Ubisoft past the bolshie, protectionist French Government.

Once any French company gets a beyond certain size they cease just being another French company but a tool & a pawn by the French state in holding back the pernicious influence of the Anglo-Saxon business model and a means to promote French cultural influence around the globe.

They are absolutely paranoid about losing out to the Anglo Saxons.

 

[Tams80]

I hope they don't get acquired unless they are at risk of shutting down (which doesn't seem to be the case).

We need big third party publishers, not just having games locked or at risk of being locked up in different ecosystems.

The acquisition cheerleaders can go do one.

As for Ubisoft themselves: the accusations aside, they probably make the most games by a large third party publisher that I play and enjoy. Sure, there's quite a bit of repetition, etc. but I like their games. And most aren't buggy messes on release, which I guess these days is a good point?

 

[Tams80]

Good luck getting any take over of Ubisoft past the bolshie, protectionist French Government.

Once any French company gets a beyond certain size they cease just being another French company but a tool & a pawn by the French state in holding back the pernicious influence of the Anglo-Saxon business model and a means to promote French cultural influence around the globe.

They are absolutely paranoid about losing out to the Anglo Saxons.

You say that like it's a bad thing.

And in part it is. But on the other hand you have places like the UK where those in power would sell their own grandmothers and then years later wonder why their influence around the world has waned.

You do realise that many countries are protectionist of their biggest industries? Germany, Japan, Italy, etc. Even the US to an extent, but they don't have to exercise those powers anywhere near as much as their companies are often the buyers.

 

[Puiu]

[QUOTE="EA was/is probably valued above what they wanted to spend so between Activision and Ubisoft they probably made the decision *before* most of the allegations against Activision executives and CEO were made but *after* similar ones were made against Ubisoft.

EA is overvalued but also Battlefield has been failing for 3 times in a row now, people are not that willing anymore to give it another try and be disappointing again.

Considering the money they made just with the FIFA type titles, MS will make their money back in no time.

 

[McMurdeR]

I just look at the size of these publishers and these buyouts, and the laundry list of naff games and tired franchises behind them...

Some of these publishers were amazing in the old days - including Ubisoft. It's sad that in order to make money and appeal to the mainstream, they end up churning out rubbish and become so stagnant and disinterested they're practically begging for someone to buy them out...

 

[Skyry3]

Have Sony buy Ubisoft AND EA. All three can team up (Ubisoft as in Ubi Montreal) to work on the next Battlefield. Major sequel releases that have failed in the past can get help from each other and would be all the better for Sony. If Take Two Interactive is up for grabs too, why not (they could help with open-world titles, given the success of R*'s Red Dead and GTA franchises).

 

[ET3D]

A few years ago Ubisoft was relieved that it managed to avoid buyout by Vivendi and cited creative freedom as a reason to avoid buyout. I guess that line went down the drain.

 

[emmzo]

AC is the only title keeping them afloat and if I were M$, I don`t think I`d pay big money just for that. Besides, they will turn into a NFT, free games company pretty soon and when they`ll fail hard, they will be bought much cheaper.

 

[chuckyj360]

"Since the two struck a deal to bring Ubisoft+ to Xbox Game Pass"

I do not believe Microsoft struck a deal to bring UBISoft+ to GamePass. I think MS struck a deal to bring UBISoft+ to Xbox. Completely different scenarios as it will be a stand-alone subscription service not rolled into Xbox GamePass.

 

[mattferg]

Have Sony buy Ubisoft AND EA. All three can team up (Ubisoft as in Ubi Montreal) to work on the next Battlefield. Major sequel releases that have failed in the past can get help from each other and would be all the better for Sony. If Take Two Interactive is up for grabs too, why not (they could help with open-world titles, given the success of R*'s Red Dead and GTA franchises).

Sony can't afford it. Their mcap is tiny compared to MS. That's why all they could afford was Bungie.

 

[Face76]

Ubisoft was bought by now because they don’t want it. It would have to be an offer that they really think is amazing. I mean look at the Vivendi and Ubisoft battle. Vivendi was trying to do a hostile takeover. But Ubisoft had gotten money. Some from their government. I’m mean at this point where AC brought over a billion in sales, why would they sell? Plus, Ubisoft makes a ton of money as a multi platform company and MS/Sony buying them would probably take that away. Look at MS and Bethesda and how now games like FO and ESVI are exclusives. MS would do the same thing. Another issue is MS is under the microscope now. The next buy could lead to another anti trust lawsuit. Especially since Biden is big on this. California Senator has already said that the Activision sale needs to be scrutinized down to the very last detail.

 

[CybaGirl]

As long as anyone buy it's other than sony I don't care.

Sony is an evil company IMO. Just ask any music artist that has been screwed over by them for millions!

 

[CybaGirl]

Sony can't afford it. Their mcap is tiny compared to MS. That's why all they could afford was Bungie.

GOOD, I would love nothing more than to see sony going down the gurgle so to speak!