Support NeoGAF

[Last_colossi]

I don't understand this, if Ubisoft really doesn't want to be owned by Vivendi then why don't they just buy back their own damn shares? I mean they'll probably lose a lot of money but they would make that back in a year or so wouldn't they?

I honestly don't understand how this works.

 

[Spring Drive]

I don't understand this, if Ubisoft really doesn't want to be owned by Vivendi then why don't they just buy back their own damn shares? I mean they'll probably lose a lot of money but they would make that back in a year or so wouldn't they?

I honestly don't understand how this works.

They don't have the money

 

[Last_colossi]

They don't have the money

Wait, so Ubisoft's shares are worth more than the money they make? Could they get a temporary loan or something? This is confusing.

 

[Tagavaka]

I think this is what Canadian Prime Minister Justin Trudeau's random visit to Ubisoft Montreal was partly about a few months back.

If Vivendi decides to close or move the Montreal branch after a possible takeover that is quite a few jobs Montreal or Canada loses

Maybe Ubisoft asked him there for the PR and to try some games but also maybe to plead their case, although i'm unsure what Trudeau or the government could do

PS: This is just wild speculation

 

[PtM]

Wait, so Ubisoft's shares are worth more than the money they make? Could they get a temporary loan or something? This is confusing.

I'd wager they need the money they make to keep their business running.

 

[True Fire]

I hope they can still make games like Steep and For Honor...

They will still make games, just as Activision did. The problem is that Vivendi will gut their intellectual properties, so things like Watch_Dogs and Assassin's Creed are basically doomed. Remember what happened to Guitar Hero?

 

[Calm Mind]

I'll be OK with this if it means we'll get a Prince of Persia mobile game

ftfy

 

[Mivey]

After the ways Ubisoft treated Patrice Désilets, they have 0 sympathy from me. I also doubt their smaller IPs are really at risk. The only reason those games exist, is because they are small games, there's little risk but much to gain. Killing of future Child of Light-like games will not make Ubi more profitable.

 

[Thraktor]

If ANY of the major 3 were to buy out a stake, it would be Sony and Microsoft but only if they could get exclusive rights to some key franchises which would cost a ton of capital and probably at that point is pretty much a takeover therein of itself. Anything less and your other major competitor still gets all the same games you do so what's the point?

The inverse of situation is largely the same, if both choose to do nothing and the worst case scenario still happens, you lose some but the other guy loses near an exact amount in terms of # of games and their quality. All in all, it either requires some serious muscle power in terms of $$ or you both stand to lose and there's no reason to really take a risk on that.

If it would have benefited any of the major 3 they would have already done it.

Buying a large third party like Ubisoft in order to make their games exclusive to your platform is just throwing money away. The only reason they can afford to spend $100 million per game is that they can maximise revenues by selling on every feasible platform. Cut away any of those platforms and you'll just have turned the profitable company you bought into a loss-making one. Hence why MS keep releasing Minecraft on non-Microsoft platforms after purchasing Mojang, it's not worth throwing away billions of dollars of revenue for a handful of exclusives.

This is an insane idea.

According to the Financial Times, Ubisoft have been actively looking for a friendly investor in the games industry to buy enough shares to prevent the Vivendi takeover. Given how few companies there are in the industry large enough to do so, it's pretty safe to say that Nintendo would have been one of the companies they reached out to.

From Nintendo's point of view, they talked in 2014 about being open to mergers & acquisitions, and have since made two notable acquisitions; a mystery $150 million company and a 10% share in DeNA (worth around $200 million).

I absolutely don't expect Nintendo to do it, due to the size of the shareholding they would likely need to take, but if they only needed to take a 10-15% stake to guarantee Ubisoft's independence, it would be somewhere within the realm of possibility.

 

[LizardKing]

I don't understand all these people somehow thinking that Nintendo will buy some Ubisoft stake.

What does Ubisoft bring to Nintendo?
-Some ports of needed 3rd party franchises
-Perhaps some creative projects like Rayman/ZombiU that work for a while but then get ported to other consoles anyway.

Either way, having Ubisoft on board porting everything doesn't really increase the appeal of their hardware to a significant degree compared to the competition, and if Ubisoft continues to make best sellers this really only benefits the hardware of Sony and MS more than it could ever benefit Nintendo.

Now we can think darker.

What can Ubisoft falling to Vivendi mean for Nintendo?
-In the worst

Spoiler

best

case scenario lets assume that Ubisoft is totally gutted, a major talent exodus occurs and the studio stops finding commercial success due to poor game quality. This means that Nintendo, whose main software selling point relies on their first party doesn't lose that big of a hit, and any potential licensing fees are dwarfed by what those games give to Sony and MS. It also means that in comparison, the competitor platforms manage to look worse due to this total breakdown in quality and how they sell by the strength of their 3rd parties. TLDR: All of them lose in this case but the others manage to lose "more".

Now of course this is talking only about the worse case where Ubisoft just gets totally shelled, but either way, Nintendo doesn't not gain much by risking this kind of move, nor do they stand to lose a great deal if they choose to do nothing. So they do nothing.

If ANY of the major 3 were to buy out a stake, it would be Sony and Microsoft but only if they could get exclusive rights to some key franchises which would cost a ton of capital and probably at that point is pretty much a takeover therein of itself. Anything less and your other major competitor still gets all the same games you do so what's the point?

The inverse of situation is largely the same, if both choose to do nothing and the worst case scenario still happens, you lose some but the other guy loses near an exact amount in terms of # of games and their quality. All in all, it either requires some serious muscle power in terms of $$ or you both stand to lose and there's no reason to really take a risk on that.

If it would have benefited any of the major 3 they would have already done it.

Pretty sure Nintendo (or MS or Sony) wouldn't buy nearly 50% of Ubisoft without complete console exclusivity. Would be like a Rareware 90's situation.

 

[styl3s]

What is Vivendi's stance on collectibles in games?

What if Vivendi were the people who demanded to have collectables in the games?

 

[Schnozberry]

Nintendo already does that to some extent (with companies like Next Level Games, Monster Games and various smaller Japanese studios), and they should continue to do so where good opportunities exist, but buying a stake in Ubisoft wouldn't be the same as spending money directly on development. They'd be exchanging one liquid asset (cash) for another liquid asset (Ubisoft shares) and, as Ubisoft is a profitable company, they can expect dividends from that asset and potential growth in the value of the asset. Securing Ubisoft support for NX would be a secondary benefit of shifting the composition of their asset portfolio, and would potentially give them the benefit of €500 million a year worth of games appearing on their system without having to actually pay for any of the R&D directly. That said, even for a company with Nintendo's cash reserves, it's a huge asset purchase for them, and there's nothing in their history to suggest they'd make a move like this.

Fair point on the potential upsides, but the downsides seem to outweigh the potential opportunity costs. They could just as easily wait until Vivendi takes over, and come to them with a proposal to try and secure Ubi IP for the NX, and I bet it wouldn't cost them 1.5 billion Euros.

 

[SketchTheArtist]

After the ways Ubisoft treated Patrice Désilets, they have 0 sympathy from me. I also doubt their smaller IPs are really at risk. The only reason those games exist, is because they are small games, there's little risk but much to gain. Killing of future Child of Light-like games will not make Ubi more profitable.

Oh please. You only have a handful of tweets and some snippets of interviews from both sides. Far from enough to actually pass judgement. Desilets is doing just fine now.

Hoping for the worst because you don't like the games a company makes is quite petty. We're not only talking about jobs that could be lost but people who are actually trying to save a company they build themselves 30 years ago.

 

[duckroll]

Wait, so Ubisoft's shares are worth more than the money they make? Could they get a temporary loan or something? This is confusing.

Ubisoft is a public company. It maintains the size it does because it is financed by being a public offering. The question is not "why doesn't Ubisoft buy back its shares" because that's not a sane option for a company. It is also not the -company- that is opposed to Vivendi taking over (pro-top: companies aren't people), but rather the founders of Ubisoft who are opposed to the take over. These founders don't have the money to fight Vivendi's bid because they are individuals and Vivdendi is a huge media company.

 

[Elfstruck]

If every active GAF member bought one Ubisoft share, could we do our own takeover?

Lets do it. :lol

 

[Mivey]

Oh please. You only have a handful of tweets and some snippets of interviews from both sides. Far from enough to actually pass judgement. Desilets is doing just fine now.

Passing judgement? I'm not Salomon, I don't need to justify my views to anyone. But if something smells like fish, looks like fish and tastes like fish, I call that a fish. And Ubi trying to kill of a project because it could hurt AssCreed is totally what I expect them to do, even though the guy at least got his IP back in the end. Not that it's useful now.

So yeah, that the same company is now in trouble from the same kind of corporate ruthlessness is just beautiful irony, not something to fear.

 

[Hypereides]

Hopefully, Yves will start engaging the back up plan he mentioned soon.

Ubisoft regularly cranks out sequels that aren't particularly creative. They sometimes make Activision and EA blush. Would Vivendi really be a big downgrade?

If you think Ubisoft's output isn't creative now, then imagine what will happen when capitalists will take over and reroute all their resources into the biggest IP, ditching everything else. Minimum risk on top of that. With relatively almost no creative changes inbetween new installments. Worst case scenario though.

But, it'll likely get worse.

 

[Djungelfrukt]

Ubisoft should do a kickstarter.

 

[Fularu]

I own Child Of Light and Valiant Hearts. 2 small creative games doesn't balance out the big budget trash.

As I said, you're obviously clueless about the non mainstream Ubisoft games.

 

[Thraktor]

Fair point on the potential upsides, but the downsides seem to outweigh the potential opportunity costs. They could just as easily wait until Vivendi takes over, and come to them with a proposal to try and secure Ubi IP for the NX, and I bet it wouldn't cost them 1.5 billion Euros.

What would Nintendo have to give Vivendi to secure NX support, though? Based on Activision's support under Vivendi's ownership and Ubisoft's support under Guillemot's reign, it would be reasonable to suppose that it would be easier (i.e. cheaper) to guarantee support from a Guillemot-run Ubi than a Vivendi-run Ubi.

Again, though, there's a financial difference here between taking a shareholding in a company and paying (through advertising buy-ins or however it would be structured) for the support directly. For Vivendi to have any interest in a Nintendo offer, Nintendo would have to (directly or indirectly) spend at least enough to offset the cost of porting the games. This means a cost of perhaps tens of millions of Euros each and every year they want to retain that support, and that's actual expenditure, not an asset purchase.

Taking aside the figure of €1.3b for a moment, if Nintendo buys any number of shares in Ubisoft (or any other publicly traded company) that's not expenditure, it's an asset purchase, and the asset is worth the same amount at the time of purchase as you spent on it (by definition). Publicly traded shares also have an expected future value equal to their current value (plus government bond yields), which is to say that in the median case, owning a share of a company for a given amount of time is equivalent to holding the same amount of cash. The difference, obviously, between holding shares and cash is that shares are volatile, and that cash isn't. Holding shares increases your portfolio risk (both on the upside and downside), so the "cost" of exchanging cash for shares for a company like Nintendo is entirely down to their risk aversion.

So the question becomes, how risk-averse are Nintendo versus how strategically beneficial would a stake in Ubisoft be for them? They obviously aren't throwing money around like Tencent with acquisitions, but they were willing to drop $200 million last year on a stake in DeNA when they felt it strategically advantageous, so you'd have to say they'd consider shareholdings in the low hundreds of millions of dollars if necessary. If the actual cost of buying enough shares to gain a "kingmaker" position of being able to keep Vivendi out is anywhere near €1.3b (which was only a rough calculation based on current share price and zero other friendly investors) then you'd have to say it would be well beyond Nintendo's historical trend when it comes to risk-aversion. If the same thing could be achieved with a ~10% stake in the company, however, then it may be the kind of thing that Nintendo would consider.

As it is, if the Guillemots haven't been able to prevent Vivendi from taking over Gameloft, then I don't see them finding anyone willing to come to their rescue this time around.

 

[10k]

I wish I had fuck you money so I could buy Ubisoft or at least stop Vivendi from taking over lol.

 

[Fox Mulder]

Fucking Vivendi.

Ubisoft is my favorite developer and publisher. If Vivendi takes them over, im guessing that they will just shut them down or something else that's bad. Every one out of three games I play is from Ubisoft. Seriously, some other publisher needs to help out Ubisoft and fight off Vivendi.

They won't shut down a huge investment after spending the money, but will likely influence and change what ubi makes for short term profits.

I hate to see hostile takeovers, but I also don't really like anything ubi does anyways and already view them as a yearly sequel factory.

 

[Xiao Hu]

Nintendo already does that to some extent (with companies like Next Level Games, Monster Games and various smaller Japanese studios), and they should continue to do so where good opportunities exist, but buying a stake in Ubisoft wouldn't be the same as spending money directly on development. They'd be exchanging one liquid asset (cash) for another liquid asset (Ubisoft shares) and, as Ubisoft is a profitable company, they can expect dividends from that asset and potential growth in the value of the asset. Securing Ubisoft support for NX would be a secondary benefit of shifting the composition of their asset portfolio, and would potentially give them the benefit of €500 million a year worth of games appearing on their system without having to actually pay for any of the R&D directly. That said, even for a company with Nintendo's cash reserves, it's a huge asset purchase for them, and there's nothing in their history to suggest they'd make a move like this.

That Osaka mentality...

On the other hand we're witnessing a Nintendo that is, based on their previous standard, 'aggressively' branching out with IP licensing in various manners (fashion, theme parks, possible movies, even own toy linesetc.). I read it as a fundamental change in Nintendo's corporate policy and the way they used to operate. We have a company now that based on recent moves is more willing than ever to take riskier steps to secure their position. All of this is of course relative since a) those have been smaller steps and b) the diversification should have been initiated round about 7/8 years ago and not after a catastrophical product line like the Wii U.

 

[Y2Kev]

While I don't think Vivendi is going to shake up Ubisoft particularly strongly (at least from a consumer perspective), I can't help but possess morbid fascination at the creeping way in which they are taking over. First, Gameloft and replacing Guillemot on the board. Now, just inching bit-by-bit with Ubisoft.

It is like watching a snake swallow a rabbit whole over the course of a day.

So I have no idea what French filing requirements are like, nor do I know what Ubisoft's bylaws and associated agreements look like, but I think Vivendi is doing this because Ubisoft will not negotiate in a "friendly" manner.

If they were both US companies, what Vivendi would do is launch a tender offer for Ubisoft's shares. Basically, Vivendi says, "Hey shareholders, I will give you 20 days to sell me your shares for $50 bucks." Once Vivendi hits 50%, they become the owner of Ubisoft; once Vivendi hits 90%, they can legally squeeze out all other holders (so they could force the minority owners to sell).

Often you'll see investors acquire large shares of a target company by amassing options (otherwise the SEC requires filings once you hit 5% ownership) and then triggering them at a certain point to, oh, oops! now I own 10% of your company in a very stealthy fashion. Less traditional is just what Vivendi is doing...just buying up shares on the open market. Last year Teva acquired shares of Mylan in the open market at the same time as it was basically about to go hostile and try to acquire the company. I think they got just over 5%. The risk here is that if the bid fails, the shares seriously lose value and then you have a large, money-losing stake in an equity investment. Corporates do not take speculative positions in companies. Plus, in the US market, the acquiree can actually sue to stop the acquirer.

So I don't really understand how this is working. I don't know anything about French law or French M&A, but this is not an efficient process.

I don't know why Vivendi just isn't tendering for Ubi.

edit: I see that Vivendi has already said it will not launch one for the next six months. Now you never WANT to go hostile but I don't get them!

 

[Lime]

What has me worried about Vivendi is Blizzard's portfolio during Vivendi and post-Vivendi.

 

[Fularu]

What has me worried about Vivendi is Blizzard's portfolio during Vivendi and post-Vivendi.

Nevermind Blizzard's portfolio, look at Sierra's gutting

 

[Lime]

Nevermind Blizzard's portfolio, look at Sierra's gutting

That was Vivendi's fault? Damn I didn't even know

 

[DeuceGamer]

What would Nintendo have to give Vivendi to secure NX support, though? Based on Activision's support under Vivendi's ownership and Ubisoft's support under Guillemot's reign, it would be reasonable to suppose that it would be easier (i.e. cheaper) to guarantee support from a Guillemot-run Ubi than a Vivendi-run Ubi.

Again, though, there's a financial difference here between taking a shareholding in a company and paying (through advertising buy-ins or however it would be structured) for the support directly. For Vivendi to have any interest in a Nintendo offer, Nintendo would have to (directly or indirectly) spend at least enough to offset the cost of porting the games. This means a cost of perhaps tens of millions of Euros each and every year they want to retain that support, and that's actual expenditure, not an asset purchase.

Taking aside the figure of €1.3b for a moment, if Nintendo buys any number of shares in Ubisoft (or any other publicly traded company) that's not expenditure, it's an asset purchase, and the asset is worth the same amount at the time of purchase as you spent on it (by definition). Publicly traded shares also have an expected future value equal to their current value (plus government bond yields), which is to say that in the median case, owning a share of a company for a given amount of time is equivalent to holding the same amount of cash. The difference, obviously, between holding shares and cash is that shares are volatile, and that cash isn't. Holding shares increases your portfolio risk (both on the upside and downside), so the "cost" of exchanging cash for shares for a company like Nintendo is entirely down to their risk aversion.

So the question becomes, how risk-averse are Nintendo versus how strategically beneficial would a stake in Ubisoft be for them? They obviously aren't throwing money around like Tencent with acquisitions, but they were willing to drop $200 million last year on a stake in DeNA when they felt it strategically advantageous, so you'd have to say they'd consider shareholdings in the low hundreds of millions of dollars if necessary. If the actual cost of buying enough shares to gain a "kingmaker" position of being able to keep Vivendi out is anywhere near €1.3b (which was only a rough calculation based on current share price and zero other friendly investors) then you'd have to say it would be well beyond Nintendo's historical trend when it comes to risk-aversion. If the same thing could be achieved with a ~10% stake in the company, however, then it may be the kind of thing that Nintendo would consider.

As it is, if the Guillemots haven't been able to prevent Vivendi from taking over Gameloft, then I don't see them finding anyone willing to come to their rescue this time around.

Would they realistically need to get to a 51% stake to ward off Vivendi? Wouldn't, say, 35% combined with Guillomets make it extremely difficult for Vivendi to get the shares required for a takeover?

 

[MilkBeard]

I guess this is just an inevitability.

And when it happens, I suspect Yves Guillemot to jump ship, especially after the comments that they've made about the takeover.

It's hard to say how things will go afterward. I don't know enough about either company to comment. I don't think that most of the employees will jump ship either, they will stay unless something really crazy happens.

 

[grosvenor_92]

The only way I see Vivendi not eventually taking them over is if our government decides to step in.

 

[vinnygambini]

I don't think Vincent Bollore wants a full takeover of Ubisoft, but rather have the same structure they've previously had with Activision Blizzard.

Once the acquisition of Gameloft is complete, Vivendi will most likely up its stake in Ubisoft to 30% in the next 6 months and then offer to merge both companies as one core unit.

Vivendi will end up being the majority shareholder, Guillemot family will retain their stakes and ask that the culture and values of Ubisoft remain to which Vivendi will give, but with annual targets.

 

[Fularu]

That was Vivendi's fault? Damn I didn't even know

When we say Vivendi is poison/cancer, we know.

I've hated them with a passion since the end of the 90s

 

[Comfort Jones]

Ubisoft represents some of the more cynical aspects of gaming but all in all, their output throughout their history has been impressive.

I think I speak for most when I say: fuck off, Vivendi.

I'm sure they'll give this thread a read and take your words into consideration.

 

[Hero of Legend]

Don't forget the rumors of Beyond Good & Evil 2 being NX exclusive. There may be more of a chance of Nintendo helping out than most would think if this is true.

I also wonder if Nintendo would possibly also help by maybe buying Rayman, Rabbids, and BG&E from Ubisoft, thus giving them the money to help buy more of their shares, and Nintendo of course gets said IPs, even better if they get Ancel with them to maybe look after those IPs in a sort of "Nintendo Montpellier" team of sorts, official or not.

Maybe his team working on Wild perhaps. (Edit: Wild Sheep, that's the company).

 

[Deleted member 471617]

They won't shut down a huge investment after spending the money, but will likely influence and change what ubi makes for short term profits.

I hate to see hostile takeovers, but I also don't really like anything ubi does anyways and already view them as a yearly sequel factory.

Never understood why any company would want to purchase or take over another company just to change it/make it worse? Money wise may be better in the short term but in the long term, it would be worse so I really don't see the point.

Yearly sequel factory? Sorry but this is such bullshit. Outside of Assassin's Creed and Just Dance (which to me doesn't really count), what franchises have they released on a yearly basis?

EA and Activision are far worse in my opinion.

Whatever happens, im just hoping it's after Ubisoft releases For Honor and Ghost Recon Wildlands.

 

[rokkerkory]

Bring back jade raymond

 

[faridmon]

This is horrible.

Vivendi is gonna destroy Ubisoft slowly but surely, just they did with Canal+

Also, pathetic to see some people here championing the idea of Ubi going bust.

 

[Morrigan Stark]

"I love video games because the real innovation and magic comes when our teams and players are free to create," explained Guillemot.

"Free to innovate. Free to express themselves. Free to take risks and have fun."

Sorry, Mr. Guillemot, this hostile takeover sucks and all that but.... LOL

 

[duckroll]

Don't forget the rumors of Beyond Good & Evil 2 being NX exclusive. There may be more of a chance of Nintendo helping out than most would think if this is true.

I also wonder if Nintendo would possibly also help by maybe buying Rayman, Rabbids, and BG&E from Ubisoft, thus giving them the money to help buy more of their shares, and Nintendo of course gets said IPs, even better if they get Ancel with them to maybe look after those IPs in a sort of "Nintendo Montpellier" team of sorts, official or not.

Maybe his team working on Wild perhaps. (Edit: Wild Sheep, that's the company).

This post is cute.

 

[Dennis]

Someone on GAF told me Vivendi is shit and wrecks companies.

Oh well, we got Assassin's Creed 2 out of Ubisoft at least.

I wonder if Vivendi as the first thing will cancel Beyond Good and Evil 2.

 

[JeremyEtcetera]

As long as this takeover does not effect the releases and quality of Steep and South Park: TFB, I'm ok with this.

 

[MisterHero]

Welp, Nintendo had their chance.

They should at least acquire one major 3rd-party before said 3rd-party is swallowed by massive conglomerates!

 

[Hero of Legend]

This post is cute.

Well, it's not like I'm the only one suggesting the idea of Nintendo helping out.

 

[Vena]

Well, it's not like I'm the only one suggesting the idea of Nintendo helping out.

They won't, and if they are doing BG&E2 it isn't to help Ubisoft. Its to help themselves and MAYBE help Ancel finish his passion project.

 

[Deleted member 471617]

Here's a question -

Could Ubisoft sell off their IP's while this is going on in order to make the company worthless to where when Vivendi does a hostile takeover, they basically wouldn't have any IP's to take over?

 

[Hero of Legend]

They won't, and if they are doing BG&E2 it isn't to help Ubisoft. Its to help themselves and MAYBE help Ancel finish his passion project.

Naturally, just wondering if they're in constant talks because of this (Just Dance 2017 being allowed to be announced for NX is also interesting).

Obviously it's nowhere near something that will happen. Just that I read folks earlier suggesting Nintendo help out and added my own 2 cents.

 

[sflufan]

Here's a question -

Could Ubisoft sell off their IP's while this is going on in order to make the company worthless to where when Vivendi does a hostile takeover, they basically wouldn't have any IP's to take over?

Such ludicrous insanity would undoubtedly spark multiple shareholder lawsuits.

 

[Deleted member 471617]

Such ludicrous insanity would undoubtedly spark multiple shareholder lawsuits.

Wouldn't the shareholders accept since they would be making money off selling IP's? Also, "insanity"??? Maybe the most insane idea could be the smartest idea.

 

[malboroking]

I'm sure they'll give this thread a read and take your words into consideration.

Don't be pedantic.

 

[sflufan]

Wouldn't the shareholders accept since they would be making money off selling IP's? Also, "insanity"??? Maybe the most insane idea could be the smartest idea.

No, the shareholders would not accept that as you would be gutting the future revenue streams from those IPs on which the stock price is derived. In addition, this would be a serious violation of the fiduciary duty of management to the stockholders who are the owners of the firm.

The notion is so ludicrous that characterizing it as insanity almost fails to do it justice.