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UbiSoft Entertainment Inc.

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Can Tencent salvage Ubisoft's sinking ship?Ubisoft’s stock pumped 35% couple of days ago following a Bloomberg report suggesting that Tencent may either acquire the company or take it private Although the French gaming company didn’t confirm or deny the speculation, it did state that it’s considering "all strategic options" for the benefit of its stakeholders and will notify the market when necessary If Tencent proceeds, it would mark another significant acquisition in a wave of major gaming deals over recent years: - Activision Blizzard acquired by Microsoft for $69 billion in 2023. - Zynga acquired by Take-Two for $12.7 billion in 2022. - ZeniMax Media acquired by Microsoft for $7.5 billion in 2021. - Savvy Games acquired by Scopely for $4.9 billion in 2023. - Bungie acquired by Sony for $3.7 billion in 2022. - Glu Mobile acquired by EA for $2.4 billion in 2021. - Keywords Studios acquired by EQT for $2.4 billion in 2024. Ubisoft’s valuation sits at just $2 billion, nearly 90% below its peak in 2021! The stock fell by more than 40% in September alone, so this recent surge is only a brief reprieve. Given its diminished value, a potential buyer offering a premium wouldn’t necessarily be a massive win. So, how should we interpret this news, and what can we anticipate for future gaming M&A activity? Let’s break it down. Key Points 1.Ubisoft’s Challenges 2.Potential Buyers 3.IP Gold Rush 4.Future of Gaming M&A 1. Ubisoft’s Challenges Ubisoft has faced setbacks including canceled games, delays, and a dip in quality in the post-pandemic era. Let’s take a look at the fiscal year 2024, which ends in March. Consider this metric reflects the total amount spent by users within a period, covering game sales, in-game purchases, subscriptions, and downloadable content (DLC). It’s an important measure of business performance, with net bookings recognized as revenue over time, depending on content delivery and user engagement Key takeaways: Digital-first: 86% of Ubisoft's net bookings come from digital sales (premium, free-to-play, and subscriptions). It was 12% in 2013, illustrating the transformative past decade. Far behind on mobile: Ubisoft has trailed its peers, with only 7% of revenue coming from mobile. In contrast, nearly half of the industry’s revenue comes from smartphones. Margins improved after cost-cutting: Digital games are a high gross margin business, particularly with the back catalog (title released in previous years) making up nearly two-thirds of net bookings. Targeted restructurings impacted FY23, making the short-term margin trend misleading. Ubisoft laid off 1,700 employees between September 2022 and March 2024, roughly 6% of its workforce. Short-lived turnaround: FY23 was a challenging year, with Net bookings collapsing by 18% with the underperformance of Mario + Rabbids: Sparks of Hope and Just Dance 2023. In FY24, Net bookings rebounded sharply, growing 34% with the successful release of Assassin’s Creed Mirage and The Crew Motorfest. FY25 Collapses in a Week: After the underperformance of Star Wars Outlaws (released at the end of August and originally expected to be a blockbuster) and the delayed launch of Assassin’s Creed Shadows from November to February, Ubisoft revised its FY25 net bookings forecast down to €1.95 billion, a 16% decline year-over-year (compared to the "solid growth" expected earlier). The company now anticipates barely breaking even on an adjusted basis. The decision to delay Assassin’s Creed Shadows just weeks before its scheduled release was influenced by the poor reception of *Star Wars Outlaws*. However, the three-month delay might not be enough to resolve concerns over game quality or criticisms from the Japanese community regarding historical and cultural inaccuracies. But that’s not all! In addition to these financial and operational difficulties, Ubisoft has faced allegations of a toxic workplace. Several former executives from the *Assassin’s Creed* studio were arrested as part of an investigation into sexual assault and harassment. This situation mirrors the downfall of Activision Blizzard in the months leading up to its acquisition by Microsoft, which leads us to potential buyers for Ubisoft. 2. Potential Buyers Ubisoft remains a family-run company, largely overseen by its founders. The latest annual report reveals the following voting rights: - The Guillemot family controls 20.5% - Tencent owns 9.2% In September, minority shareholder AJ Investments claimed it had gained backing from 10% of shareholders and called for Ubisoft to be sold or taken private, estimating a fair value of €40 to €45 per share. With shares currently trading at €13, this seems highly optimistic. So, who are the likely candidates for a Ubisoft buyout? Key Players: -Tencent: Already a significant shareholder, Tencent could increase its stake or seek majority control. As the largest gaming company globally by revenue, Tencent has a history of acquisitions, such as its purchase of Finnish publisher Supercell (*Clash of Clans*) for $8.6 billion in 2016. However, Tencent's aggressive expansion has drawn regulatory scrutiny, especially in the US and Europe, which could complicate any attempt to acquire majority control of Ubisoft. Guillemot Family: The founding family might be interested in reclaiming greater control of Ubisoft and steering it in a new direction. To finance the buyout, they could collaborate with a private equity firm or a strategic investor. However, given Ubisoft's current size and the significant cost associated with a buyout, it could be difficult for the Guillemot family to pursue this path on their own. Other Potential Investors: Private equity firms or strategic investors within the gaming sector might also join a buyout consortium. These investors could be drawn to Ubisoft’s valuable intellectual property (IP) and see potential for a turnaround under new leadership. Gaming Companies: Besides Tencent, the largest gaming revenue players in 2023 are highlighted in the visual. -Apple and Google: Although both tech giants have been expanding into gaming, acquiring Ubisoft seems unlikely given their current antitrust scrutiny. -NetEase, EA, and TakeTwo: These companies would find an Ubisoft acquisition to be a straightforward studio consolidation. NetEase, in particular, might find it appealing to broaden its console and PC presence in the West, but Tencent’s involvement could complicate this. -Sony and Microsoft: As first-party publishers, both would benefit from boosting their subscription services with exclusive content. They’ve aggressively acquired studios in recent years. Given that the Activision Blizzard deal was approved, there’s no reason a Ubisoft acquisition couldn’t pass as well. In their latest fiscal year, gaming accounted for 32% of Sony’s revenue and less than 9% of Microsoft’s. 3. IP Gold Rush In the gaming industry, intellectual property (IP) is crucial. Iconic franchises like *Call of Duty*, *Mario*, and *Grand Theft Auto* are multi-billion-dollar assets that significantly impact a company’s future. As a result, many companies are eager to acquire established IPs or gain access to the teams behind them. Why is IP so valuable? -Lower risk: Developing a new AAA game can cost hundreds of millions and take years, with no guarantee of success. Acquiring a popular IP allows companies to tap into an existing fanbase and reduces the risk of failure. -Brand power: Consumers are more inclined to purchase games with familiar characters, worlds, or studios behind them. Well-known creators like Hideo Kojima (*Metal Gear*) and Hidetaka Miyazaki (*Elden Ring*) are just as significant. -Content scalability: Famous IPs can generate revenue through sequels, spin-offs, and licensing deals. Large publishers have the infrastructure to maximize returns across multiple channels. This strategy isn’t unique to gaming. Media giants follow similar patterns: -Amazon’s acquisition of MGM: In 2021, Amazon acquired MGM for $8.5 billion, gaining access to franchises like *James Bond* to enhance its Prime Video content. -Disney’s acquisition of Lucasfilm and Marvel: These acquisitions have delivered massive returns through movies, TV series, and licensing opportunities. Why now? -Consolidation pressure: Subscription services and cross-platform gaming are driving consolidation. Big companies want to secure valuable IPs to differentiate their services and attract loyal customers. Meanwhile, smaller studios are more open to selling early to avoid competing in an increasingly crowded and capital-intensive market. -Value in ownership: Owning IPs in gaming allows companies to create expansive worlds and engage players long-term through updates, expansions, and live services. This keeps players coming back and generates recurring revenue, which is harder to achieve in video content. -Cross media expansion: Popular games can expand into movies, TV series, or theme parks. For instance, *The Last of Us* became a hit HBO show, and Sony is developing TV adaptations for Horizon Zero Dawn and God of War. This leads to more revenue, a broader audience, and long-lasting IP appeal. The Ubisoft Angle Ubisoft’s IPs, like *Assassin’s Creed*, *Far Cry*, and *Tom Clancy’s Rainbow Six*, have significant potential for future growth, despite recent struggles. However, realizing that potential might require new leadership or a fresh strategy, which a new owner could provide. Even though Ubisoft faces challenges, its strong portfolio might attract various buyers. For the right acquirer, Ubisoft's problems could represent a chance to buy low and rework its creative direction. As more studios seek to hedge their risks in this changing industry, we can expect more mergers and acquisitions (M&A) in the future. 4. The Future of Gaming M&A The gaming industry is constantly evolving, and several trends are fueling a surge in mergers and acquisitions: -Mobile-first: Mobile gaming is the largest and fastest-growing segment, making companies with a strong mobile presence attractive. Examples include Playrix (Gardenscapes,Homescapes) and Scopely (MONOPOLY GO!,Stumble Guys) -Cross-platform: Cross-platform play is becoming the standard, and companies with expertise in this area are in high demand. Unity and Epic Games play vital roles with their popular game engines, while major studios are also building in-house solutions. - Cloud gaming: Still in its early stages, cloud gaming has the potential to revolutionize how games are played. Companies with cloud infrastructure are becoming more valuable, with leaders like Microsoft (Game Pass Ultimate), Sony (PlayStation Plus Premium), and NVIDIA (GeForce Now) pushing the trend. -Metaverse: Beyond AR/VR, virtual worlds like *Roblox* and *Fortnite* have created immersive, social spaces that keep players engaged beyond traditional gameplay. Companies developing these experiences are attractive targets for firms looking to capitalize on this trend. -Web3 & Blockchain: Web3 games enable decentralized ownership and in-game economies powered by blockchain. This trend lets players own and trade digital assets, opening new revenue streams and drawing interest from companies exploring the intersection of gaming and crypto. -AI driven studios: AI is already influencing game development, and its role will only grow. Companies with AI expertise, particularly in game design and player behavior analysis, are becoming highly sought after. As AI reduces development costs, budgets could shift towards live services and marketing. The Big Picture The gaming industry is consolidating, with major players acquiring valuable studios and IPs. While there will always be space for indie games—especially as AI lowers the barrier to entry—industry consolidation will likely strengthen the top companies and leave less room for those in the middle. If a company like Ubisoft, valued at over $12 billion in 2021, is struggling to survive on its own, the future looks bleak for many smaller studios
EURONEXT:UBI
by moonypto
4
Tencent and Guillemot Brothers evaluate the purchase of UbisoftUbisoft, the famous video game developer responsible for sagas such as Assassin's Creed and Far Cry, is in the midst of a financial crisis that has caused a 50% drop in its shares over the last year. Faced with this situation, Tencent and the Guillemot Brothers, the company's founding family, are considering acquiring full control of the company, according to Bloomberg. This potential deal would turn Ubisoft into a private equity firm, with Tencent holding a stake of less than 10%, with no veto rights or ability to sell its shares for the next five years. Meanwhile, the Guillemot Brothers would retain operational control of the company, in an attempt to stabilize it and keep other potential buyers away. Key points: • Financial crisis: Ubisoft has lost 50% of its stock market value in the last year. • Possible acquisition: Tencent and the Guillemot Brothers are negotiating a deal to take control of the company. • Market impact: Ubisoft shares jumped more than 30% following rumors of the takeover. • Terms of the deal: Tencent would have no veto rights and could not sell its stake for five years. • Future of Ubisoft: The goal is to revitalize the company and protect it from further acquisitions. • This move could mark a new stage in Ubisoft's history as it struggles to regain its position in the video game industry. Ion Jauregui - ActivTrades Analyst ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
EURONEXT:UBI
by ActivTrades
UBISOFT REKT- What happens when you're one of the biggest video game companies in the world and you rest on your laurels? You sink. - That said, as traders, we can always attempt to capitalize on a dead cat bounce. - Right now, nothing to buy, if Ubisoft not down more and bounce before, just forget it. ------------------------------------------------------------------------------------------ Trading Parts : ------------------------------------------------------------------------------------------ - Buy around 10€ ( 30% invest ) - DCA Rebuy to 8.5€ ( 70% invest ) ------------------------------------------------------------------------------------------ - TP1 : 17.9€ - TP2 : 29.9€ ------------------------------------------------------------------------------------------ SL : 5.9€ ------------------------------------------------------------------------------------------ Stay S4fe Happy Tr4Ding !
EURONEXT:UBILong
by thecryer
Historical buying zoneHello , This is not financial advice / not investing advice , do your home work please , i just provide my point of view and educate , thank you . As presented in the wave trend indicator , We fell to an over sold area under the green line , which represent usually the best time to buy hence bottom area , only 2 times before we enterd this over sold area . Looking at the price making lower low and both Rsi and WT doing higher low or same , giving a bullish divergence ... Make the bullish case stronger . The hirizontal trend line comes from the 6month chart . Happy to hear your thoughts . Gl and enjoy.
EURONEXT:UBILong
by sharonfa
1
UNPOPULAR REALISTIC OPINION ON UBISOFT - THE WORST IS BEHIND USIs Ubisoft the most hated stock on the market right now? Both sentiment and price action seems to have gone in extremely negative territory. The herd seems to have chosen Ubisoft as this year's scapegoat for hate. Nevertheless, a more realistic and positive outlook exists, for investors looking for value, Ubisoft now seems primed for UPSIDE. In this post I like to explain why. Ubisoft dropped another 17% today as of writing this post, trading at 9.45 euros per share. This capitulation comes after the postponement of AC Shadows release, objectively speaking a solid and wise decision given the backlash about the pre-footage and allowing Ubisoft to make significant changes in making the release a success. Technically speaking, Ubisoft is in a great value for money area : - Monthly RSI sitting at oversold (never happened before) - Mothly RSI making new lows, with price making higher lows (= hidden bullish divergence) - UBI sitting slightly below the bottom support of it's historic upward price channel -- A low that in my opinion can easily be reclaimed as support - Monthly MACD bearish momentum weakening, signaling strength despite relentless bearish price action - Lots of horizontal support close to current price (green horizontal lines) - Blue line covers a scenario I see developing over the next few weeks (reclaim of bottom channel support - purple line; followed by reclaim of bottom falling wedge - black line), trade sideways and slightly up to eventually break bullish out of the falling wedge). Additionally, and fundamentally speaking, investors seem to forget the massive catalog that Ubisoft has in terms of games, a catalog universally available for purchase, promoted by discounts making buyers tempted to stock up, that will always result in revenue, potentially being underestimated by the market. Earnings might not be so bad? Fundamentally I believe Ubisoft is set for an epic comeback, one way or another, a management shift or a surprising good release or sales results of existing catalog could trigger a relief rally turning in continued upside. The bears have been in control for too long and are too confident it sure seems. All opinions welcome; I'm not a financial advisor and am simply sharing my thoughts from an investor perspective. Thanks for reading!
EURONEXT:UBILong
by Wikimax
1
Ubisoft: Guillemot's terrible Fall in Disgrace Ubisoft is recently facing a series of challenges. Along with other video game companies such as Epic Games and Electronic Arts, Ubisoft has been the subject of a complaint by the European Consumers' Organization (BEUC). The complaint alleges that these companies mislead gamers, especially children, by selling virtual currencies in games, leading to excessive spending and hiding the real cost of digital items. BEUC urges regulators to take action against these practices. Video Games Europe, which represents the companies singled out, defends these practices, assuring that they comply with European laws and the PEGI Code of Conduct. At the same time, Ubisoft faces a fall in the value of its shares after the very disappointing reception of “Star Wars Outlaws”, failing to meet investors' expectations, compared to games from other houses such as “Space Marine 2: Warhammer 40k” which sold more than 400,000 copies in the month of release. The game, which was key to the company's financial recovery after four years of negative cash flows, received a low user score on Metacritic, which has caused Ubisoft's stock to hit its lowest level since 2015. This is on top of the poor reception of another recent release, “Xdefiant,” negatively impacting sales expectations. The long-awaited “Skull & Bones,” which relied on French government subsidies and resulted in another broken title, also passed without much fanfare. One of the keys to their fall from grace is the replication of the “Assasin's Creed” model in everything they have done and the franchise's extension of that model of stretching the model until it no longer works. These failures are only a reflection of an overly commercialized and repetitive model where consumers of video games barely have to think and repeat mechanics over and over again, and all video games generate the idea of playing the same video game over and over again. The insertion of absurd mechanics without utility has been another of the failures of the latest Starwars game, which have finally disappointed players despite being a franchise that in “theory” should sell by itself due to its renown. In the midst of these difficulties, and a complaint requesting his resignation as CEO, the Guillemot family, founder of Ubisoft, is considering buying the entire company to avoid selling it to third parties. Despite rumors of interest from firms such as Blackstone Inc. and KKR & Co, the Guillemots plan to maintain control to avoid a hostile takeover. They currently own 15.9% of the shares and 22.3% with voting rights, and are looking to partner with a private equity firm to acquire the remainder. These moves reflect the family's strategy to retain control of Ubisoft at a time of significant challenges. If we look at the UBI.FR chart it shows us the commented a continued slump since July 2018, a recovery zone in December 2021 and since then the firm has not stopped falling in results. If we look at the economic data the 2018 profit peak was given by an increase in gross and net profit higher than the previous year (+139.452M). From there, although the company has had a high profit decline and in 2021 presented a balance in positive, returning again to present the following years losses. This 2024 , the company presented a balance in the first part of the year positive (+157.8M) compared to a terrible 2023 in results (-494.2M). And seeing the current news about the current games, it is foreseeable a continuation of the fall if the data of the new games do not present better sales results, which could make the company fall to the zone of 10 euros per share or even end up being taken off the stock exchange or acquired by another market giant interested in its products as could be Microsoft. Microsoft must wait at least until 2033 to be able to acquire Ubisoft because during the merger of Activision, Blizzard and King, within the structural measures proposed by Microsoft's lawyers to comply with British antitrust regulations, it highlighted its promise not to buy Ubisoft, following the CMA's approval of Microsoft. Therefore, in the short term, it only seems viable for Ubisoft to be acquired by other competitors or to be taken out of the market, if it continues to be negative. Ion Jauregui - Analyst Activtrades ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
EURONEXT:UBIShort
by ActivTrades
4
Ubisoft Entertainment SA / UBIUbisoft Entertainment aka ubi "bug" is a french video game publisher headquartered in Saint-Mandé with development studios across the world. Its video game franchises include Assassin's Creed, Far Cry, For Honor, Just Dance, Prince of Persia, Rabbids, Rayman, Tom Clancy's, and Watch Dogs. Ubisoft was one early investors in web3 technologies and projects too last year was a terrible year for ubi because not only they didn't succeed with their franchise like farcry 6 but also they entered the bear market while they were working on their bigger projects like AC. “We are clearly disappointed by our recent performance,” said Ubisoft Chief Executive Yves Guillemot. “We are facing contrasted market dynamics as the industry continues to shift towards mega-brands and everlasting live games, in the context of worsening economic conditions affecting consumer spending.” 2023 is a big year for ubi and they are going to publish some of their best games like Assassin's Creed Mirage, Tom Clancy’s The Division Heartland and skull and bones ubi stock now in Accumulation phase and its next targets are 21, 23 and 25
LSIN:0NVLLong
by moonypto
1
Ready player 2?The gaming sector is growing with each generation contributing to the increased demand and recognition of E-sports. Ubisoft is a leading video game developer with a solid track record in blessing us with some of the best games like Assassin's Creed, Far Cry, Watch Dogs, etc. Being a gamer, Ubisoft is an amazing company with a tanking share price. And just got the opportunity to take a partial entry into the stock at a price I have been waiting for. With mobile gaming being a growing space, Ubisoft has a lot of room for growth and innovation.
LSIN:0NVLLong
by Candles254
Risky position but promising in the long termDear long-term investor, welcome to this new analysis of Ubisoft. Despite a massive disappointment from gamers towards Ubisoft's games EURONEXT:UBI , accused of preferring numbers to quality, Ubisoft has announced that they want to get closer to their community, which could announce better games in the future? A few days ago, they announced a potential remaster of Splinter Cell, a nostalgic license for many people, this announcement was rather well received by the majority despite a number of players worried about seeing this game "destroyed". From an analytical point of view, a large majority of indicators point to a potential upside, but the market sentiment is rather bad, which could herald a drop to 36.71. It's hard to guess the market in the short term, but with Ubisoft's numerous announcements, we're pretty bullish in the long term on the company's future. But feel free to do your own research, this is just an analysis, this scenario may not come true. This is not an investment advice. Here are the scenarios I can share with you: A possibility of making a w chartist figure on the 39,64 level, followed by a massive climb, perhaps to the 57,2 or higher. A possibility to break the 39.64 to consolidate towards the 36.71, then go back up. An unlikely possibility of breaking even lower than 36,71.
EURONEXT:UBILong
by Absconse
Ubisoft could post a potential 30% only if...⚠️ This is not investment advice, but an analysis made to allow a potential insight into the market's evolution based on indicators. ⚠️ According to me and the indicators ( RSI , MACD ) we will start to follow a short term uptrend in a few days. Also, I personally think that Ubisoft is a company that can have a nice and long run despite some big misses, but this bullishness will be short-lived because the volumes are not following at all. ⚠️ Feel free to do your own analysis and comparisons before any buying and selling. ⚠️ I advise you to buy in stages as shown on the chart, to have a correct average purchase price even if you buy it higher than expected you will still be profitable !
EURONEXT:UBIShort
by Vanne43
Uuii UbisoftBuying points: -trend line from July,15 -strong support at 51.14€ -MACD: MA lines extremely under average -RSI: oversold Selling points: -all SMAs above the price -MACD shows negative momentum Fundamentals -selling pressure bc of bad earnings of the gaming industry (take-two) -seasonal summer impact -> people are more outside, fewer sales -guidance of next earnings: meh Conclusion Technically the stock has a great potential to bounce back to a certain level which I think is 59-60€. So, with a tight stop loss, we are looking for a 17% return. My strategy, in this case, is to sell the stock when it hits SMAs like 50 or 100 (main goal 100). You could argue that the share has the chance to get to the upper downtrend line but the fundamentals do not support this theory, not in the short-mid term. Short opportunities could arrive after we go under the trend and support line (full daily closed candle). This would become approximately 20% down to the next support line of 40€. As all ways, I try my best to calculate the best risk/reward ratio. If you like my analysis you can follow for more quality content.
EURONEXT:UBILong
by Chrlstlan