As the video games industry indulges its recent interest in rapid consolidation, almost every major publisher has had to face questions about where they stand. After both Bethesda and Activision Blizzard were absorbed by Xbox, a pair of acquisitions considered so massive as to be unthinkable, the assumption has been that the remaining major pubs like Ubisoft and Electronic Arts would fall into the crosshairs next.
Ubisoft Yves Guillemot spoke about the company’s position back in February, making it clear that Ubisoft would consider any acquisition offer that came its way.
During its recent Q4 investors call, Guillemot reaffirmed that this position hasn’t changed.
‘There has been a lot of talk around consolidation in the industry, and Ubisoft in particular,’ said Guillemot. ‘Our overall position is clear and well known: As we said last February, we have everything we need to remain independent. We have the talent, the industrial and the financial scale, and a large portfolio of powerful IPs to create massive value in the coming years.’
If it happens, Ubi feels, then it happens. What a difference five years makes. In 2017, Ubisoft found itself battling back Vivendi and its attempt at a hostile takeover. At the time, the Guillemots were defiantly French about the whole thing: Ubisoft was a family business, and it would retain its independence or perish nobly attempting to protect it.
Of course, acquisitions and hostile takeovers are very different things. Any acquisition it chose to accept would necessarily be on Ubisoft’s terms.
Could an acquisition still happen?
It wouldn’t come as a surprise to see Ubisoft receive an acquisition offer.
Last year, the company was engulfed in allegations of company-wide misconduct that resulted in the departure of many senior staff and significant internal restructuring. It also dipped a tentative toe into the NFT space, adding tokens to its disappointing step-child Ghost Recon: Breakpoint. The decision to use an unpopular game as its testbed for a potentially unpopular move proved a canny one: the move drew widespread condemnation for what was interpreted as a cash grab and, having got its answer on the question of web3 viability, Ubisoft appeared to quietly let the whole thing go.
I expected to hear something about the results of Ubisoft’s NFT push during the Q4 investor call. Maybe even an update on blockchain technologies or applications it was exploring. Neither topic came up once. Make of that what you will.
Despite this, Ubi’s EOFY reports indicate that its stable of IP remains popular and valuable. Far Cry 6, a game that met with split critical reviews, went on to set franchise sales records. Assassin’s Creed Valhalla is still selling well and drew in more unique players in 2021-22 than it did in the 2020-21 financial year. Its also continuing its internal rebuild. Women now represent 25% of all Ubisoft staff, up from 22% in 2020. Women now account for 42% of its Executive Committee, and 45% of the Ubisoft board respectively.
Its 2022-23 financial year is fairly stacked, with a new Mario + Rabbids game on the way, Skull & Bones appears to be on the move again, and its brand partnership on Avatar: Frontiers of Pandora could wind up very lucrative in markets where Avatar is most popular. It even has a Star Wars game in the pipeline. Ubi’s earnings notes say it has four new mobile games in development, and intends to expand its AAA titles with more new IP and licensed brands.
Regardless of public perception, Ubi’s books look good, and the years ahead look financially promising. These are all things that would tempt a suitor.
And that’s where we leave the story for now. Ubisoft appears to be in a financially enviable position. It can court acquisition offers from interested parties until it hears a price it likes and continue to perform under its own steam until then. We will see what the next couple of years brings, for Ubi, and the wider industry.
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