Ubisoft CEO says still open to other partners after Tencent deal

Ubisoft, France's largest video games maker, is still open to other partners following a deal in which China's Tencent would increase its stake in the company, co-founder and CEO Yves Guillemot said on Thursday.

Guillemot's comments, made at a closed press event on Saturday before an online showcase event at which the company asked that its content not be made public, came on the heels of a difficult day for Ubisoft shares, which fell 17% after the group announced that Tencent would become its largest single shareholder with a total stake of 11%. The deal values the "Assassin's Creed" maker at around $10 billion. "We remain completely independent and we can move with any outside company if we want to," said Guillemot, who founded Ubisoft with his four brothers in 1986. "This was a great bargain with Tencent," he added. "We can do whatever we want." Traders and analysts said the Tencent deal, which enabled the world's biggest games firm by revenue to enter into a shareholding deal with the Guillemots, removed the speculative allure of Ubisoft shares. The group has long been seen as a takeover target, as the Guillemots hold a minority stake in the group. Yet the Guillemot brothers managed to fend off a raid by French tycoon Vincent Bollore through his media group Vivendi (OTC:VIVHY). Gameloft, the smaller mobile video game maker previously run by Yves Guillemot's brother Michel, was acquired by Vivendi six years ago. The secretive brothers, sons of agricultural merchants from a small town in Brittany in western France, have vowed to protect their independence. Yves Guillemot, 62, reiterated that goal on Thursday. "Our first intention is to claim our destiny," he said. That expectation has been tested recently by a combination of poor financial results and allegations of sexual harassment, which has led to a revamp of the company's management and promises to change a corporate culture described by some former employees as sexist. "Yes, we stumbled and we accept that," Guillemot said. "We have learned a lot along the way and have made meaningful progress with concrete action plans collectively led by our leaders." Ubisoft spent about 200 million euros in cash on operations during the 2020/2021 fiscal year, compared with 169 million in operating cash flow generation the previous year. The company's financial woes come amid a boom in the video game industry and a wave of mergers and acquisitions, on top of several delays in the release of new video games and increased pressure on management. Of particular note was Microsoft's (NASDAQ:MSFT) plan to buy "Call of Duty" maker Activision Blizzard (NASDAQ:ATVI) for $69 billion.   Guillemot said Ubisoft aims to expand its three "core" games - "Assassin's Creed," "Far Cry" and "Tom Clancy's Rainbow Six" - to all digital platforms as part of its plan to return to growth. Guillemot said the group aims for these three brands to reach a total annual revenue of 2 billion euros within five years. The next version of "Assassin's Creed", "Mirage", will be released in 2023, Guillemot said. Ubisoft is also partnering with streaming platform Netflix (NASDAQ:NFLX) to develop three original mobile games, including one based on Assassin's Creed. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!