Ubisoft is no stranger to takeover whispers. In 2004, Electronic Arts made a run at the video game publisher, but was ultimately rebuffed. In 2015, Vivendi made an even more serious attempt that took years to defuse. Now Ubisoft is the subject of speculation once again—only this time, the deal could actually happen.
The past few years have been far from the best for Ubisoft—and 2024 has been especially painful. The highly-anticipated Star Wars: Outlaws was a sales disappointment and the company delayed the next entry in its Assassin’s Creed franchise weeks ago, cutting fiscal guidance at the same time.
Now, there’s talk that Ubisoft is considering a buyout that would take it private, with shareholders Tencent and the Guillemot family, including CEO Yves Guillemot, leading the charge.
Ubisoft acknowledged the rumors in a statement on Oct. 7, saying “Ubisoft has noted recent press speculation regarding potential interests around the Company. It regularly reviews all its strategic options in the interest of its stakeholders and will inform the market if and when appropriate.”
Talk of an Ubisoft takeover started floating long before the guidance was lowered, though. Rumors have been swirling as far back as May. Back then, the company was 30% off of its 52-week high and trading for less than half of what it did in July 2018. Things haven’t improved. Ubisoft shares are down 44% year to date and have dropped 78% in the past five years.
Ubisoft has a rich catalog of owned franchises (including Assassin’s Creed, the Rabbids, Prince of Persia, and Watch Dogs) as well as locked-in licensing deals (Tom Clancy, Uno, South Park). Those have historically made it appealing to suitors, but the company’s troubles of late have cast a shadow.
Players lambasted Outlaws, calling the combat repetitive and noting the stealth mechanics needed more polish and were too similar to Assassin’s Creed. And the optional season pass model that tacked an additional $40 onto the game’s price for additional missions was widely panned. There were also some players who review bombed the game (and the upcoming Assassin’s Creed Shadows), claiming a “forced DEI narrative.” Even Elon Musk piled on.
Michael Pachter of Wedbush cited that review bombing in a note to investors, writing: “This is a case of a rare incel victory that led to Ubisoft having to take down its numbers.”
Around the same time, AJ Investments, an activist investor, announced it has gathered support from 10% of Ubisoft’s shareholders and began pushing to sell the company to a private equity firm or unnamed third party.
Instead, Ubisoft reportedly took another route, contemplating its own buyout.
“The company clearly has value, and with the support of the Guillemot family and the involvement of strategic investor Tencent, we think that a formal takeover bid has a chance of succeeding,” Pachter wrote in a separate note to investors.
Having the CEO and his family consider a buyout in partnership with Tencent might seem unusual if you don’t know the Guillemots. From 2009 to 2019, I interviewed Yves Guillemot on a fairly consistent basis, meeting every year at E3 and occasionally speaking when events warranted, especially during the Vivendi takeover battle.
He’s a CEO who has always marched to his own beat and follows his passions, whether it’s his love of Swiss dark chocolate or hopping on his Harley and taking a road trip to clear his head. Ubisoft tops the list of those passions, though.
Fifteen years ago, as Vivendi bought more shares and held more of the company’s voting rights than the Guillemot family, he began hunting for partners. He ultimately found them in Tencent (the massive Chinese gaming company) and the Ontario Teachers Pension, who paid just over €2 billion to Vivendi to buy out its shares. Tencent has since raised its stake in the company to a 10% ownership interest. The Guillemot family holds a 15% stake, but has 25% voting control.
A private buyout would likely bring job cuts. Ubisoft has 19,000 employees worldwide and Pachter says based on current guidance, revenues work out to just €103,000 per employee. The company also needs to shake up how it makes games, something Guillemot himself acknowledged when announcing the lowered guidance.
“We acknowledge the need for greater efficiency while delighting players,” he said. “As a result, . . . the Executive Committee, under the supervision of the Board of Directors, is launching a review aimed at further improving our execution, notably in this player-centric approach, and accelerating our strategic path towards a higher performing model to the benefit of our stakeholders and shareholders.”
The bigger question, though, is will that be enough? Ubisoft has alienated a portion of its player base in recent years and needs to get them back. Reading online comments about the company might make it appear that’s nigh-hand impossible to do. But if the video game industry has one truism, it’s this: It only takes one really good game to make people forget vows of boycotts and past missteps.
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