Tuesday, September 26th 2023
Ubisoft CEO Discusses Acquisition of Activision Cloud Streaming Rights
The UK's Competition and Markets Authority (CMA) rejected a previous draft of Microsoft's proposed deal to merge with Activision Blizzard (to the tune of $69 billion). The expected summer completion date was missed due to this sole case of opposition—all of the other international regulatory bodies had approved a conglomeration of Xbox and Activision portfolios. Ubisoft later emerged as an unlikely knight in shining armor, since the UK CMA has provisionally approved freshly revamped conditions—it turns out that Microsoft had agreed to sell its cloud streaming rights to the French video game publisher. The Financial Times sat down with one of the company's co-founders—CEO Yves Guillemot—and discussed how cloud gaming will revolutionize the industry.
Guillemot was not asked to comment on how much his firm has agreed to spend—allegedly a one-off fee—on purchasing Activision Blizzard's cloud streaming rights (from Microsoft). He did discuss the inherent risk of embracing a relatively immature market technology: "When Netflix first said it was going to go into streaming, their shares fell a lot and they were widely criticized. Today, we see what they have become. It's going to be the same with video games, but it will take time. But when it takes off, it will happen very quickly...We strongly believe in the next five to 10 years, many games will be streamed and will also be produced in the cloud. That's what pushed us to go forward with the Microsoft deal." This looks to be an unusual move for Ubisoft, considering the rumors of a recent strategy shift in reaction to downturns in sales.Insiders claim that company leadership is restructuring internal development teams around a smaller number of "core" franchises, along with a shelving of newer franchises and experimental projects. Ubisoft's weakened state upped gaming community speculation regarding a possible takeover from a rival publisher—last year Tencent shelled out $297 million for an 11% stake in Ubisoft. The Financial Times asked Guillemot about the current layout of shareholders—he replied: "We wanted to work with Tencent to ensure that the board had good control of the company's capital. But that doesn't stop the board from listening to proposals." Microsoft is bound to its agreement with the UK CMA—so a potential takeover of Ubisoft is strictly forbidden across a 15-year long period.
Guillemot was not asked to comment on how much his firm has agreed to spend—allegedly a one-off fee—on purchasing Activision Blizzard's cloud streaming rights (from Microsoft). He did discuss the inherent risk of embracing a relatively immature market technology: "When Netflix first said it was going to go into streaming, their shares fell a lot and they were widely criticized. Today, we see what they have become. It's going to be the same with video games, but it will take time. But when it takes off, it will happen very quickly...We strongly believe in the next five to 10 years, many games will be streamed and will also be produced in the cloud. That's what pushed us to go forward with the Microsoft deal." This looks to be an unusual move for Ubisoft, considering the rumors of a recent strategy shift in reaction to downturns in sales.Insiders claim that company leadership is restructuring internal development teams around a smaller number of "core" franchises, along with a shelving of newer franchises and experimental projects. Ubisoft's weakened state upped gaming community speculation regarding a possible takeover from a rival publisher—last year Tencent shelled out $297 million for an 11% stake in Ubisoft. The Financial Times asked Guillemot about the current layout of shareholders—he replied: "We wanted to work with Tencent to ensure that the board had good control of the company's capital. But that doesn't stop the board from listening to proposals." Microsoft is bound to its agreement with the UK CMA—so a potential takeover of Ubisoft is strictly forbidden across a 15-year long period.