Microsoft’s Activision Blizzard acquisition bodes well for Ubisoft, CEO says

Ubisoft CEO Yves Guillemot has said Microsoft’s bid to acquire Activision Blizzard can be viewed as a sign that Ubisoft is on the right track with its current business strategy.

While the merger has often been framed as Microsoft seeking to purchase Call of Duty, Xbox boss Phil Spencer has consistently claimed that the $69 billion deal is primarily driven by the company’s mobile gaming ambitions.

Of course, Activision Blizzard is also home to some of gaming’s biggest worldwide brands, as well as leading live service and PC games – all areas Microsoft hopes to acquire a greater foothold in, and which Ubisoft is pursuing too.

During Ubisoft’s first quarter earnings call on Thursday, Guillemot was asked if he thinks the Activision deal will be a catalyst for further M&A activity in the space and if so, what his view is on remaining independent in an industry that’s consolidating.

“I think it’s good news that the transaction can go through because it’s really showing the power of IPs and where the industry is going. So, there will be lots of opportunities too in the future for all the companies,” he replied.

“And It’s also showing the value of IPs that can now be on console and PC, but also mobile, and become more worldwide brands, and when we say worldwide it’s really everywhere in the world, and that’s a fantastic opportunity.

“And Microsoft is saying that the mobile part of the Activision deal is important,” Guillemot continued, “so all the investment we are making to be stronger on mobile are also in line with that, so all those elements will help the value of the company to grow.”

In January, Ubisoft said it had cancelled three unannounced games as it moved to double down on its biggest IPs and live services.

The company said it was “facing major challenges as the industry continues to shift towards mega-brands and long-lasting titles than can reach players across the globe, across platforms and business models”.

It said it had spent the last four years attempting to adapt its biggest brands (Assassin’s Creed, Far Cry, Ghost Recon, Rainbow Six and The Division) to these converging trends. And while the games from this investment phase have yet to be released, Ubisoft expects them to bear fruit in the coming years.

On the mobile front, Ubisoft will release free-to-play games Rainbow Six Mobile and The Division Resurgence during its current fiscal year ending in March 2024.

Two mobile Assassin’s Creed games are also in the works. A mysterious collaboration with Netflix could tie into its upcoming live-action series with the streaming giant, while China-set Codename Jade will begin closed beta testing next month.

Codename Jade is a free-to-play game set to be published by Tencent’s Level Infinite division, after Ubisoft announced a major strategic partnership with the Chinese company last September.

Further reading

Ubisoft plans to increase the number of Assassin’s Creed developers by 40%

The company has at least six new entries in the long-running series in development

In April 2022, it was reported that Ubisoft was attracting takeover interest from several private equity firms.

And the following month, it was claimed that Guillemot Brothers Limited, the holding company of Ubisoft’s founders, was considering teaming up with a private equity firm to acquire the company.

“There has been a lot of talk around consolidation in the industry and in Ubisoft in particular,” Guillemot said during an earnings call last May.

“Our overall position is clear and well known. As we said last February, we have everything we need to remain independent. We have the talent, the industrial and financial scale, and a large portfolio of powerful IPs to create massive value in the coming years.

“It has provided us with the plan to build strategic partnerships with the biggest players in entertainment and tech. The current speculation is putting in plain sight the real appeal and value of our assets and of our value creation potential.”