Ubisoft insists still open to other partners after Tencent deal
'Assassin's Creed' maker Ubisoft is still open to other partners after China's Tencent Holdings (HKG:0700, OTC:TCEHY) agreed to raise its stake in France's biggest video games maker.To get more latest news on tencent, you can visit shine news official website.
The deal values Ubisoft at about US$10bn, but news Tencent would become its single largest shareholder with an 11% stake sent shares 17% lower.
"We remain totally independent and we can act with any outside company if we want to," said Ubisoft co-founder and CEO Yves Guillemot, according to a report in Reuters. "We can do whatever we want."
Traders and analysts say Tencent's deal with the Guillemots has taken away the speculative appeal of Ubisoft.
The group has long been a takeover target as the Guillemots own a minority stake, though the brothers fended off a raid by Vivendi media mogul Vincent Bollore.
Six years ago, Vivendi bought out Gameloft, once run by Michel Guillemot, Yves' brother.
Ubisoft reportedly burnt through about €200mln in cash operationally during its 2020-2021 financial year, after generating €169mln in operational cash flow the previous year.
Weak financial results and sexual harassment allegations led to a revamp of Ubisoft's governance, but due to the company's financial circumstances, several new video games have been delayed.
All of this was happening when the video game industry was experiencing a boom and a wave of acquisitions.
One of these was Microsoft's US$69bn acquisition of 'Call of Duty' maker Activision Blizzard, which is now under scrutiny by the UK competition watchdog.
To return to growth, Ubisoft plans to deploy its three 'pillar' games - 'Assassin's Creed', 'Far Cry' and 'Tom Clancy's Rainbow Six' - across all digital platforms.
Guillemot said the group aims to reach €3bn in revenue from these three brands within five years.
'Assassin's Creed ' is to release its next edition 'Mirage' in 2023, as Ubisoft develops three original mobile games with Netflix Inc (NASDAQ:NFLX), including one based on 'Assassin's Creed'.