Ubisoft CEO Says Still Open To Other Partners After Tencent Deal

Yves Guillemot, CEO of Ubisoft, speaks onstage during the Ubisoft E3 conference at the Orpheum Theater in Los Angeles, Calif., June 15, 2015. REUTERS/Mario Anzuoni

PARIS, Sept. 10 (Reuters) – Ubisoft (UBIP.PA), France’s largest video game maker, is still open to other partners after a deal in which China’s Tencent (0700.HK) is co-opting its stake in the company. – founder and CEO Yves Guillemot said Thursday.

Guillemot’s comments, made during a private press event that the company had asked not to be made public before an online showcase event on Saturday, came on the heels of a rough day for Ubisoft’s shares, which fell 17% after the group had announced that Tencent would become its largest shareholder with a total stake of 11%. read more

The deal values ​​the creator of “Assassin’s Creed” at about $10 billion.

“We remain completely independent and can act with any outside company if we want to,” said Guillemot, who co-founded Ubisoft in 1986 with his four brothers. “That was a big negotiation with Tencent,” he added. “We can do whatever we want.”

Traders and analysts have said that the Tencent deal, which sees the world’s largest games company enter into a revenue shareholder pact with the Guillemots, has removed the speculative appeal of Ubisoft stock.

The group has long been viewed as a takeover target, as the Guillemots have a minority stake in the group. Nevertheless, the Guillemot brothers managed to fend off an invasion by the French magnate Vincent Bollore through his media group Vivendi (VIV.PA).

The smaller mobile video game maker Gameloft, formerly headed by Yves Guillemot’s brother, Michel, was swallowed by Vivendi six years ago.

The secretive siblings, sons of agricultural traders from a small town in Brittany, western France, have vowed to protect their independence, a goal Yves Guillemot, 62, reaffirmed on Thursday. “Our first intention is to own our destiny,” he said.

MEANINGFUL PROGRESS

That prospect was recently put to the test by a combination of weak financial results and allegations of sexual harassment, leading to a revamp of the company’s board of directors and commitments to change a company culture labeled as sexist by some former employees. .

“Yes, we stumbled, and we recognize that,” said Guillemot. “We have learned a lot along the way and made meaningful progress with concrete action plans led jointly by our leaders.”

Ubisoft operationally burned approximately $200 million in cash during fiscal year 2020/2021, after generating $169 million in operating cash flow the year before.

The company’s financial troubles came on top of several delays in the release of new video games and increased pressure on management amid a boom and mergers and acquisitions in the video game industry.

These were notably marked by Microsoft’s plan to acquire Call of Duty maker Activision Blizzard for $69 billion.

As part of its plan to grow again, Ubisoft aims to roll out its three “pillar” games – “Assassin’s Creed”, “Far Cry” and “Tom Clancy’s Rainbow Six” – across all digital platforms, Guillemot said.

The group aims for these three brands to achieve annual sales totaling 2 billion euros within five years, according to Guillemot.

Guillemot said that “Assassin’s Creed” will release the next edition “Mirage” in 2023. Ubisoft is also partnering with streaming platform Netflix (NFLX.O) to develop three original mobile games, including one based on Assassin’s Creed.

Reporting by Mathieu Rosemain; Editing by David Holmes

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