Following an agreement in which China’s Tencent (0700.HK) will increase its share in the company, Ubisoft (UBIP.PA), France’s largest video game developer, is still open to potential partners, according to co-founder and CEO Yves Guillemot.
Following a difficult day for Ubisoft’s stock, which fell 17% after the company announced Tencent would become its single biggest shareholder with an overall stake of 11%, Guillemot’s remarks, which were made at a closed press event whose content the company asked not to be made public before a showcase event online on Saturday.
“We remain totally independent and we can act with any outside company if we want to,” said Guillemot, who along his four brothers founded Ubisoft in 1986. “That was a big negotiation with Tencent,” he added. “We can do whatever we want.”
According to traders and analysts, the Tencent agreement, which sees the largest video gaming company in the world by revenue join a shareholder agreement with the Guillemots, diminished the appeal of Ubisoft shares as a speculative investment.
Given that the Guillemots own a small portion of the company, the company has long been considered a candidate for acquisition. The Guillemot brothers were nevertheless able to repel a raid by French businessman Vincent Bollore through his media company Vivendi (VIV.PA). Six years ago, Vivendi acquired Gameloft, a smaller mobile gaming developer that was once run by Yves Guillemot’s brother Michel.
The reclusive siblings, who are from a small village in western France’s Brittany and are the offspring of agricultural traders, have promised to defend their independence, a commitment that Yves Guillemot, 62, reaffirmed on Thursday. Our main goal, he declared, is to control our own fate.
Recent charges of sexual harassment coupled with poor financial outcomes put that prospect to the test, forcing the corporation to restructure its governance and make commitments to alter a workplace environment that some former employees have labelled as sexist.
Despite having earned 169 million in operational cash flow the year before, Ubisoft burned through nearly 200 million euros in cash during its fiscal year 2020–2021.
In the midst of a boom and M&A wave in the video game business, the company’s financial difficulties came on top of a number of delays in the delivery of new video games and increased pressure on management.
These were distinguished by Microsoft’s intention to pay $69 billion for Activision Blizzard, the company that produces “Call of Duty.” Ubisoft wants to make its three “pillar” games—”Assassin’s Creed,” “Far Cry,” and “Tom Clancy’s Rainbow Six”—available on all digital platforms as part of its strategy to resume growth, according to Guillemot.
Within five years, the group hopes to have a combined annual turnover of 3 billion euros from these three brands, according to Guillemot. According to Guillemot, “Assassin’s Creed” will release its “Mirage” update in 2023. Additionally, Ubisoft and streaming service Netflix (NFLX.O) are working together to create three original mobile games, including one based on the Assassin’s Creed franchise.
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