One of the biggest, meanest battles in video games is finally over. I'm not talking about gamers fighting over consoles, that battle's never going to end. No, I'm talking about the threatened hostile takeover of game publisher Ubisoft by French media conglomerate Vivendi. After a protracted back and forth between the companies, though, the battle is over and Vivendi is going home.
Ubisoft announced this week that it has signed an agreement with Vivendi for the company to sell all 30-million-plus shares it purchased in its attempt to take the game publisher over. The agreement involves investment by two new partners, including Chinese media company Tencent, as well as investment from the Ubisoft founders themselves, the Guillemot brothers.
There's a lot to unpack here. Over two years ago, Vivendi started to buy up stock in Ubisoft. Over the next couple years, they would continue to acquire more Ubisoft stock, buying right up to the point where French law would require Vivendi to make a buyout. By this point, the company had even bought out another company – GameLoft – owned by the same family entirely. A buyout seemed all but inevitable.
Time after time, Ubisoft kept fighting to stay independent, bringing in new investors and shareholders. Ubisoft frequently declared its desire to remain independent, and the end of E3 shows for a couple years sounded kind of like lowkey Braveheart speeches.
For reference, Vivendi is worth about $24 billion as of last May, and is the company that once owned game publisher Activision Blizzard (now worth $37 billion on its own). Ubisoft, comparatively, was considered to be worth about $6.4 billion around the same time. So this was sort of a David and Goliath fight that we were all kind of expecting to end in Vivendi's favor.
A big part of this success is the intervention of Tencent. At first glance, they might look like an even bigger threat. Tencent is a Chinese company worth $500 billion, making even the huge Vivendi look tiny by comparison. But the difference is that Tencent is going into it with an agreement from Ubisoft. The company already has bigger stake in two major players in the game industry: League of Legends developer Riot Games and game engine and Fortnite developer Epic Games. Tencent has let those firms act pretty much independently to this point, and hasn't shown any interest in doing otherwise. Tencent also made an agreement with Ubisoft not to buy anymore than the 5% share it acquired part of this deal and won't take a seat on Ubisoft's board of directors.
The goal with the transaction seems to be to get Ubisoft games into China, and the two companies have signed a strategic partnership to do just that. Online games like Rainbow Six: Siege, For Honor, and The Division have proven to be steady sources of income for the publisher and the potential for them to make it big in a market like China seems huge.
All of this is good news for games and game development. While Ubisoft has has plenty of issues over the years making same-y games or being unable to animate women, among other things, we've also seen tons of weird, fun games from them like Child of Light, Grow Home. They've also been one of the biggest sourced for new, AAA-sized IP. Some games, like Watch Dogs 2, come out well, while others like The Crew, are questionable. But they're new, big, and interesting, and that's something few other game companies are doing.
Further, the guys at the top, with founder Yves Guillemot still representing his company on a day-to-day basis, are game company guys. They're businessmen, but they're in the business of making games. They have to make financial decisions, but they're not going to, say, pivot to pachinko machines and fitness centers. They'll make decisions with the goal of continuing to make games in mind. We might always agree with their decisions, but having big independent publishers like Ubisoft means we get big games made by big groups of developers. Lots of people will keep their jobs and nothing will happen to our beloved Assassin's Creed.
Ubisoft might not be a little buy compared to your typical indie studio, but compared to Vivendi, they were punching up for two and a half years before the giant finally backed down.
Here's a word of celebration from Ubisoft itself:
It's rare to see a company so publicly defending itself as Ubisoft has, and even more rare to see it come out victorious.