Blocking ABK didn’t really make sense, and yet they did it using the ridiculous cloud argument. If regulators want to block the deal they will. But I think now is the best time to acquire, and I can imagine Microsoft trying to make one last big acquisition. However, the publisher must agree to be acquired by Microsoft. Take Two will not sell with GTA coming at the end of the year. Valve seems difficult to acquire. Krafton is in Asia and I don’t think Microsoft will buy in Asia. EPIC Games could be a solution but Tencent owns 40% and Sony 5% of the company. I think that EA is perhaps the most “realistic” big acquisition because its value is stagnating and EA has no future projects that could increase it. EA has good relations with Microsoft and might be more easily convinced, but that’s just a guess. There is no guarantee that EA will want to sell or that regulators will authorize the deal.
I mean Take Two would have to sell if offered enough money, they mentioned this themselves that they work for the shareholders. This goes or any western publicly traded company (I am not sure if Asian companies act differently though). Make a good enough offer with a good enough premium and their hands are forced most of the time “We’re a public company and all public companies are potentially available and if someone shows up with up with a meaningful cash offer at a meaningful premium, every public company has to engage”
This being said I do agree EA is probably the most likely for multiple reasons like it being a good time to buy them, them arguably fitting with Microsoft best IP, Historically, culturally and in what Microsoft wants to achive, but once again it is close. In terms of big publishers I would say EA and T2 are the only ones I could seriously see happening as Tim Sweeney no longer has a majority steak in Epic Games so buying them would be harder, I don’t see Gabe or Nintendo selling (though if the oppitunity did come up Microsoft would likely leap) and for steam in particular that being blocked is actually fair due to windows dominance, Microsoft can’t afford Tencent and China wouldn’t let Microsoft buy Netease or Tencent and sony isn’t a great buy unless Microsoft wants to get back into hardware & even then Japan would probably block it over due to Sony producing stuff like semi conductors.
This being said I think if Microsoft were to continue buying Ubisoft is still most likely, they are just in prime of a position to be bought, honestly while I don’t think WB Games is that great of buy it really does seem like WBD wants to offload them so maybe they are more likely than I am giving them credit for too.
The value will be growing with the release of GTA6 so Take Two will have little reason to sell before the value stabilizes. Microsoft may offer a nice bonus, but it won’t buy a company for twice its value. Furthermore, if the value becomes too high we will have a new ABK situation with the same problems. Take Two is overvalued because of GTA6, but Microsoft could probably use that if it tries to acquire Electronic Arts.
Tim Sweeney owns 51% of Epic Games, but I think Tencent and Sony have large enough shares to contest the acquisition. Unless it is different for a private company. I don’t know.
I would love more than anyone for Microsfot to buy and save Ubisoft, but that’s not going to happen. Microsoft will want a company that is making a profit, not a dying company that has to lay off half the employees to become profitable again. It’s sad and I sincerely wish I was wrong.
I think Warner will continue to close the studios that are failing, then in a few years the gaming division will disappear and Warner will do the same thing as Disney. Warner will probably sell NetherRealm and Mortal Kombat, but the other studios don’t really have value. Rocksteady miraculously got a second chance, but given the state of Suicide Squad, I think it will be wasted. The Rocksteady of 10 years ago unfortunately no longer exists.
I mean, really depends. A companies value doesn’t usually determined present success but a bet on said companies future growth and continued success. I would argue the Zynga possibilities are more important to take twos spike in value long term than GTA 6 while it will undoubtably be the biggest game this gen and likely next gen won’t see a continuess stream of profit as GTA online is already a thing (assuming they don’t drop GTA Online 2 or something)
Pretty sure Tim Sweeny only owns 45% now. He sold a decent stake to disney and the company that owns lego since then, but with private companies if you have the majority stake you decide what the company does since you can outvote other shareholders, some call it a controlling steak for that reason
I mean putting morality aside Microsoft had 0 issue lay off large amounts of ABK and bethesda staff so i don’t know why they would be concerned with ubisoft staff. The thing is, Ubisoft is so undervalued cos they aren’t profitable but can easily be made profitable as on paper they have an easy formula to make games and powerful IP. Microsoft would just need to fix them
I think TT games also has value but this is why i think they will try to sell it sooner rather than later, so they can get the most amount of money possible from selling off their gaming divisions
Employee head count by publisher
T2 - 12,371
EA- 13,700
Ubisoft- 19,011
WB- 1,000
Embracer- 10,500
Sega- 8,623 including Sammy
Capcom- 3,531
Square- 7,300
Koei- 2,531
Bandi- 11,159
Konami- 4,890
Nintendo- 7,739
Microsoft Gaming- 20,100
SIE-12,700
While acquisitions are not completely done by employee head count Microsoft does absolutely take this into account, I personally dont ever see xbox ever acquiring ubisoft in the current market whith that level of employees. I wish they would however i just don’t see it, everything else would be a perfect fit global studios, gamepass would explode in game availability and they are a ridiculously cheap target, and of course all that IP my goodness. They will put out the newest AC it will underperform and things will get very interesting. I think Tencent may purchase them or Ubisoft will be sold off piecemeal by IP and studios. That is when Microsoft will get involved along with the other publishers. Just my guess obviously but from my view ubisoft will not survive for much longer and will ultimately be swallowed up by the industry as a whole not just 1 publisher.
Outside of GamePass, it’s only Ubisoft+ that I currently also subscribe too (from a gaming perspective).
If it were in GamePass that would be absolutely insane!
I appreciate headcount isn’t ideal, however as you say it would literally give them global presence. Ubisoft have studios everywhere!! I think Ubisoft still have tonnes of value, obviously the ABK cloud rights situation isn’t ideal either.
Would LOVE to see Microsoft acquire Ubisoft. Eliminate Ubisoft+ since it wouldn’t be needed. Shut down their PC store front which doesn’t do anything anyway and just include their games in Game Pass Ultimate day one. Best of all, since Microsoft is porting their games to Sony/Nintendo platforms, there shouldn’t be any issues with regulators. All they would have to do is find another independent publisher to take the streaming rights off Ubisoft’s hands.
The issue is, assuming Ubisoft doesn’t just go bankrupt why would they ever start selling off their profitable assets. Once again while Microsoft likely does take into account the employee count I don’t see why Microsoft would let that stop them from acquiring a powerful asset when they clearly aren’t afriad of laying off people.
I mean we would need to see if they keep that global presence cos odds are a lot of those studios would be shuttered if Microsoft or anyone really acquired Ubisoft cos simple put Ubisoft doesn’t need 50 studios but this the thing, Ubisoft is a fixer upper company, they can be incredibly profitable but they are ran down. You just need to fix them up
Assuming regulators still even care about cloud which feels like a 50/50. I think the biggest issue is probably a PR thing but Microsoft clearly doesn’t really care about that from a large scale perspect or even a personal more core fan perspective. I do think ubisoft days are numbered though and besides Tencent Microsoft is probably the best positioned and most likely to make a move on them
I should have been clearer, when i said ubisoft will sell off IP and studios I meant they will be bankrupt and the sale will be to cover debts and things of that nature, i just don’t see them surviving much longer they are in a very bad place right now. Its unfortunate they still have massive potential but are so poorly managed at this point. It would be hard to restructure them. They remind me of THQ at the end of its life cycle. I do hope the industry sees the potential in the IP and most of the studios and tries to salvage as much possible, i would love to see microsoft get splinter cell,AC and prince of persia, i could see Nintendo going after the rabbids IP and studio behind it along with Tencent going after the mobile presence, Sony could go after the the games as a service titles that they need desperately like the division and tom clancy series. I have been through acquisitions and closures and it is not a pleasant situation I hope all the workers involved come out ok.
My issue with this is i think it would unironically be more expensive to buy what they want in a bankrupcy situations than it would be to buy the comapny outright. Its not even like their swimming in debt so even if kt isn’t Microsoft I feel like someone will just acquire the company rather than wait for them to go bankrupt. Like assassins creed is worth a billion and tom clancy is probably also worth a billion so ubisoft 2 biggest franchises probably equel thw amount it would cost to buy it all so why not just do that
Then we can remove EPIC from the list.
Ubisoft would have to lay off at least 40% of employees to be profitable. This is not comparable with the ABK layoffs. This decision would have a considerable negative impact, I don’t think Microsoft will want to be involved in this. Ubisoft would bring a lot of value and potential for players, but would not bring immediate profit growth.
This is good data, it would also be interesting to have the annual profit of each company.
Ubisoft would clearly be the best choice for players, but unfortunately not for shareholders.
It would be terrible for the industry if Ubisoft were dismantled. Ubisoft must remain Ubisoft.
Question:
Should Xbox acquire studios outside just publishers or not? If yes which ones and if no state the reason why?
I don’t really see them acquiring studios any time soon. Publishers are much more attractive for immediate profit and strong growth.
I wouldn’t go that far as we don’t know if any other shareholder of epic would be willing to sell along side tim but it definitely feels a lot less likely than it otherwise would of been
I guess that is were we would have to agree to disagree. I don’t think Microsoft would hesitate to do that personally
Depends on what they want to achieve in all honesty. I think they will do both though. I could see microsoft buying platinum if the new ninja gaiden is a success in all honesty and both iron gate IOI would be logical purchases but publishers are better for immediate growth while studios trend to be better for long term growth if managed correctly
Thunder Lotus, GSC Game World and Leenzee feel like good picks alongside publisher Thunderful, 11 bit Studios or Paradox Interactive.
Those are some good picks. I do think though seeing our Asia would be the better place for another publisher seeing how gaming is on the rise there and the cost of gaming is also very low there. Just look at Wuchang and Tides of Annihilation. I think going for a small publisher in South Korea like Blueside would be good.
If we are looking at smaller Asian buys i would throw platinum games and level 5 on there
I think Ubisoft should just adopt a work for hire or contracting strategy. There are a ton of games I think could have used their open world formulas and gameplay. Atlas Fallen for example I think would have been amazing in their hands. It could have been something akin to immortal Fenix or the Prince of Persia games.
I am not really a SEGA guy but I know a lot of people talk about microsoft buying them so SEGA is exapnding their core 3 studios (Sonic Team, RGG & Atlus) while considering other M&A Oppitunities, this might affect microsofts view of buying them, depending on who they buy (it would be funny if they bought Atari then Microosft bought SEGA. Atari, SEGA, Intellivious since ATARI bought that and xbox all under 1 roof)
SEGA has been voted Publisher of the Year 2024 by Metacritic. This is the third time that SEGA has been voted publisher of the year since 2011. SEGA is undoubtedly one of the best publishers in the industry. I’m happy for the Japanese studios who will get the necessary support.