Not everything can be bought: game developer Ubisoft is trying to avoid violent takeover by Vivendi

Sources: Bloomberg and Ubisoft

For several years, Ubisoft has evolved from a small family-owned company in France into a global player in the computer games market. Ubisoft employs 10,000 people. The company opened studios in almost 20 countries of the world.

However, recently, the head of Ubisoft, Ivu Giymo, was called by a French industrialist, a billionaire and the chairman of the Vivendi media group, Vincent Bollore. “He said that we need to talk about potential synergies,” recalls Giymo.
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Two hours after the conversation took place, Guilleau learned that Vivendi had bought 6.6% of Ubisoft. It was not a proposal to discuss potential partnership opportunities, but a demonstration of Vivendi’s intention to absorb Ubisoft - whether it wants to or not.

Now Guillaume fears that Vivendi will swallow Ubisoft in parts, consistently buying shares from shareholders. To date, Vivendi has already acquired a 15% stake in the company, reports Financial Times.

Culture Vivendi is alien to Ubisoft's business and puts an end to creativity, I am sure Giymo. Jim Ryan, president of Sony Computer Entertainment Europe, describes Guillemo as a fair but hard man who is hard to deal with. But 90% of Ubisoft revenues come from overseas markets. And this is the best evidence of the success of Guillemo.

Ubisoft is the third largest producer of computer games in the world. Among the iconic - Assassin's Creed, Prince of Persia, Rainbow Six, Ghost Recon, Splinter Cell and others. Ubisoft develops games for personal computers, mobile devices and game consoles. In 2011, the company created the Ubisoft Motion Pictures film studio to release films on games.

Vivendi is the largest French media group. It owns the world-famous music holding Universal Music Group, large stakes in the second largest French mobile operator SFR, mobile operator Maroc Telecom, and the cable television network Canal +.

The cost of the company is not comparable: the capitalization of Ubisoft is 2.2 billion euros, and Vivendi is 24.1 billion euros.

The company recently became the largest shareholder of Telecom Italia , buying up 20% of its shares. Among its acquisitions is 26.7% of Gameloft , also a prominent player in the global video game industry, affiliated with Ubisoft.

On September 2, the French media conglomerate Vivendi increased its stake in Dailymotion's video hosting, owned by Telecom Orange, to 90%, buying 10% from the parent company.

According to Les Echos sources, Vivendi acquired a 10% stake in Orange for just over 27 million euros. Last June, the French conglomerate bought an 80% stake in a telecommunications company for 217 million euros. Now Vivendi owns 90% of the shares of Orange and indirectly 90% of the shares of its subsidiary Dailymotion.

The difference between games and movies is getting smaller, Guimot admits: "The video game industry can create mythical worlds, and Hollywood can create stories."

At the disposal of Vivendi about 2 billion euros in cash, which the company has received from the sale of assets in the past two years. She has experience in the games industry - Vivendi owns a controlling stake in California-based video game production company Activision Blizzard .

The head of Vivendi, Vincent Bollore, has a reputation as a cunning and ruthless businessman who knows how to create equity. But Guymo plans to outplay Bollor and preserve the independence of the family company.

The Guillemo brothers created Ubisoft in 1986. Starting with sales of games from other manufacturers, Ubisoft has grown rapidly: within a few years, it entered the markets of Great Britain, Germany and even the USA. Later, the company began its own production of games - the first of them was called Zombie.

In 2011–2015, the company's shares increased 4 times. The rapid growth ceased after Vivendi became interested in the company's business. Guymo recently announced that he was interrupting the tradition of the annual release of the new series of Assassin's Creed, and after the disappointing results of the last series, he intends to revise the terms of the franchise.

With Vivendi, Guillemo does not want to have any business: “If we want to make a movie for the international market, we will negotiate with Fox, Warner or Sony Pictures. They are experts in this industry. And we will not talk with Canal +. ”

“Vivendi has a completely different way to do business that you will never see in the UK, the United States and even Asian countries,” explains Guymo. - If you want to buy a company, you will first negotiate with it and then buy it. You do not just come and take her whole system. "

“Many companies practice big-boss management that requires blind execution of orders, but we work in the creative industry, and creativity relies on allowing people to take risks so that they can achieve outstanding results,” he says. “If our company starts to be managed by a group that does not understand the industry, but simply wants to control the business, this will quickly kill the creativity.”

In the coming days, Guillaume is going to present to shareholders a medium-term development plan. Shareholders will discuss it collectively. Neither Guillemo nor Bollore can directly influence the decision on the further development of the company (including a possible sale).

However, it is clear that the trust of major shareholders to Guillemo, as the founder of the company and a long-time partner, will play a role.

"In the video game industry, success is achieved by those companies that are able to make decisions quickly, and those who are part of large groups are not capable of this, as a rule," summarizes Guillemo.

According to Newzoo , the value of the video game market will grow from $ 91.5 billion in 2015 to $ 107 billion in 2017. The average American will spend 28.3 minutes a day on computer games in 2018, against 23.2 minutes in 2013.