France firm Ubisoft aims to rack up five billion players with Tencent deal
MONTREUIL, FRANCE — Fresh from winning a long corporate battle, French video game powerhouse Ubisoft is aiming for a tenfold surge in its global playing audience after securing a partnership with Chinese Internet giant Tencent.
“Within 10 years, Ubisoft wants to reach five billion players” who have taken up the challenge of at least one of its games, compared with the 500 million it has now, chief executive Yves Guillemot told AFP in an interview.
Speaking at the company’s offices in Montreuil, just east of Paris, Guillemot made no secret of savoring his victory against Vincent Bollore, the French chairman of Vivendi who has a long history of corporate raiding.
In 2015 Vivendi began acquiring shares in the publisher of hit titles like Assassin’s Creed and Far
Cry, threatening the Guillemot family’s control of Ubisoft since they no longer owned a majority stake.
But last month Vivendi bowed out, selling its 27.3% stake in a € 2.0- billion ($ 2.5- billion) deal that saw Tencent, a digital giant whose market values rivals that of Facebook, come in.
“As soon as they expressed their desire to leave, we brought them a solution, with partners who wanted a stake,” explained Guillemot, who nonetheless said the battle with Vivendi had an upside.
“With our strategy for creating value, we proved that we didn’t need anyone, and that they were not going to bring any added value,” he said.
When the deal was signed “there were some nice parties here”, Guillemot said, though he was in the US at the time.
‘GOOD BALANCE’
Tencent, which operates China’s ubiquitous WeChat messaging platform, is the country’s leader in social media and gaming, claiming one billion clients.
Guillemot said China had an “incredibly vibrant” PC gaming market, and huge potential for smartphone gaming.
Ubisoft had already signed a deal with Tencent last year to develop Might and Magic: Era of Chaos, which has generated Chinese sales of more than $100 million.
“We also signed an agreement to develop our Ketchapp mobile games on WeChat. We think it will add 100 million players for Ketchapp games,” he said.
Ubisoft is also betting on the growing popularity of e- sports, hoping to organise more live gaming competitions.
“The goal is to be in the top five of the most-watched games,” with titles such as Rainbow 6, For Honor and Just Dance,” Guillemot said.
And the five-year deal with Tencent, which got no seats on the Ubisoft board and said it would not raise its stake, offers some protection from further shareholder battles, after Vivendi and before that Electronic Arts in 2004.
For its part, the Guillemot family has no plans to gain a blocking minority by increasing its own 18.5% stake, with voting rights of 23%.
“We want most of all a good balance between our different shareholders, one that stays stable over the long term,” he said.
BROAD HORIZONS
The company’s ambitious target of five billion players is also based on both hardware and software innovations that are expected to sweep through the industry.
“In 10 years, handsets will be much more powerful,” with smartphones capable of exceeding current standalone gaming consoles like PlayStations, Guillemot said.
And with more people playing via cloud computing, Ubisoft will be able to deliver its games to TVs, mobile phones or even selfdriving cars.
“It’s going to make our games available on the majority of screens,” Guillemot said.
“The trick will be to create games that are adapted to these new technologies, with themes that speak to everyone.”
Ubisoft is also basking in the strength of its lineup, with Far Cry 5, the latest in the immersive blockbuster shooter series, this month becoming the fastest- selling title in the franchise.
The company said it had pulled in $ 310 million from sales in the first week alone, and has now sold more than 40 million copies of Far Cry overall since the first installment was launched in 2004.
But Guillemot said his first order of business will be to get out of the office, giving himself a few days of vacation after some fast-paced months. —