During the presentation of Ubisoft’s latest annual results in mid-June, Yves Guillemot, the boss of the French video game giant, was not trying to hide. “There is a lot of talk about industry consolidation, and about Ubisoft in particular”, he admitted bluntly, indicating that the board of directors would consider any offer that could be made to him. And no one doubts that it will present itself.
The year 2022 has already been marked by major takeovers in the video game industry. In January alone, Microsoft paid a record $75 billion (€73 billion) to get its hands on Activision Blizzard, Take-Two wrote a check for $12.7 billion to acquire Zynga, and Sony paid $3.6 billion to take over the Bungie studio.
In an ultra-competitive sector, the big players are fighting a battle for territory to acquire the most prestigious studios, and carve out the lion’s share of a market estimated at 195 billion dollars in 2021, with forecasts of annual growth in the market. 13% up to 2030, according to Grand View Research. However, Ampere Analysis forecasts a temporary slowdown of 1.2% in 2022 due to inflation.
Net profit down 23%
If no major operation has been concluded since January, Ubisoft is now a favorite target for all observers of the sector, with prestigious licenses such as Assassin’s Creed Where Watchdogs. Especially since society is weakened. On the stock market, its valuation has fallen below 5.4 billion euros, with the price of its share halving in four years (from 100 euros in 2018 to 43 euros today).
In 2021, its turnover fell by 4.4%, to 2.1 billion dollars, for a net profit falling by 23%, to 79.1 million dollars. In addition, for many months, the company has been mired in cases of sexual and moral harassment which are damaging its reputation, and have led it to part ways with several of its leaders.
This partly explains the proliferation of release reports for its games (Skull and Bones, Prince of Persia, etc.). So many elements that tend to worry investors. And to whet the lusts: “Today, it wouldn’t cost very much to buy back, and we see players such as Sony or Microsoft who are ready to stretch out large sums of money”believes Julien Pillot, teacher-researcher at the Institute of Advanced Economic and Commercial Studies. “He who does not have it will only have his eyes to cry”, also believes Charles-Louis Planade, head of international operations at the investment bank TP ICAP Midcap. Several investment funds (KKR, BlackStone) have recently looked into the matter, the Bloomberg agency said recently.
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