Ubisoft CEO says he’s still open to other partners after Tencent deal

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

PARIS, Sept 10 (Reuters) – (This September 10 story corrects three-pillar video game annual revenue target to €2 billion, para 15)

Ubisoft (UBIP.PA), France’s biggest video game maker, is still open to other partners after a deal in which China’s Tencent (0700.HK) will increase its stake in the company, its co-owner said Thursday. founder and CEO Yves Guillemot. .

Guillemot’s comments, made during a closed-door press event whose content the company asked not to be made public until an online showcase event on Saturday, came after a tough day for Ubisoft’s stock. , which fell 17% after the group announced that Tencent would become its largest shareholder with an aggregate stake of 11%. Read more

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

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

Traders and analysts said the Tencent deal, which sees the world’s biggest games company by revenue enter into a shareholders’ agreement with Guillemots, has removed the speculative appeal of Ubisoft shares.

The group has long been considered a takeover target because the Guillemots hold a minority stake in the group. Still, the Guillemot brothers managed to fend off a raid by French tycoon Vincent Bolloré via his media group Vivendi (VIV.PA).

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

The secret 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.

SIGNIFICANT PROGRESS

That outlook has been tested recently by a combination of weak financial results and allegations of sexual harassment, which has led to an overhaul of corporate governance and promises to change a qualified corporate culture. of sexism by some former employees.

“Yes, we stumbled, and we recognize it,” Guillemot said. “We have learned a lot along the way and have made significant progress through concrete action plans led collectively by our leaders.”

Ubisoft burned around 200 million euros of cash operationally in its 2020/2021 financial year, after generating 169 million in operating cash flow the previous year.

The company’s financial difficulties have added to several delays in the release of new video games and increased pressure on management, amid a boom and wave of mergers and acquisitions in the video game industry. .

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

As part of its return to growth plan, Ubisoft aims to deploy its three “pillar” games – “Assassin’s Creed”, “Far Cry” and “Tom Clancy’s Rainbow Six” – on all digital platforms, Guillemot said.

The group aims for these three brands to reach a total of 2 billion euros in annual turnover within five years, said Guillemot.

Guillemot said “Assassin’s Creed” will release its next “Mirage” edition in 2023. Ubisoft has also partnered 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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