UbiSoft Drops The Settlers Bomb

You probably heard it already, UbiSoft makes yet another version of Settlers and this time it will abandon the good old 2D graphics and introduce more realistic 3D environment. You DO understand me when I say that this was a monster surprise! How can it BE? All those cute little helpers that built the empire, one could even have named them, so dear they were. What a great mood that game had, especially while listening Orbital. I wonder, when Mario is running around, modeled after some actor with mustache?

Electronic Arts Drops The Bomb

On a conference call with investors, Electronic Arts told that they could be thinking about buying more UbiSoft stocks, maybe even a controlling stake. Naturally this had an unfavorable effect on UbiSoft's stock price, because with an open challenge like this, UbiSoft has to spend quite some money to defend itself. All the work UbiSoft has to do to defend themselves will be away from normal work. All that Electronic Arts has to do is to show the money. Electronic Arts uses elbows in such a marvelous way... Does anyone remember how they claimed that they intend to be just good shareholders?

Deal Shakedown

The story takes place in modern time. The characters involved are as follows:

Electronic Arts
Big game company, which thrives for domination of industry

News Corporation
Media conglomerate which plans to dominate game industry

Activision
Mid-size game company, which is fighting for survival

Eidos
Big game company, which is in financial troubles

Infogrames
Big game company, which is in financial troubles

Vivendi
Big game company, which is in financial troubles

UbiSoft
Big game company, which is under acquisition threat

The story so far:

Electronic Arts has been growing steadily, relaying on good quality gaming content and far reaching business decisions, like buying sole-rights to create game content, which is based on well known brands. Everybody is afraid of the Electronic Arts, since the company’s cash reserves top most other game companies market valuation. It would be easy for Electronic Arts to eat up any competitor and eating competitors is exactly what it has been doing to gain its position as the biggest game company.

Competitors like Eidos, Infogrames and Acclaim are all in some sort of financial binge. However, except Acclaim, these companies are not in a serious trouble but enough for investors to be careful while investing their money. Then there are those game companies, which are doing bit better. These companies include UbiSoft and Activision. Just like the big Electronic Arts, these guys desperately want to grow bigger so that they are able to survive the hard competition.

Electronic Arts, being the humongous goliath it is, goes around and picks the companies and intellectual rights, which fit into its plan. It uses financial muscle to push out smaller competitors and relies to every possible business tactics while doing it. Poor competitors are too focused on the games that their companies make to realize what is going on, until it is too late. Now, nobody can beat Electronic Arts head on, it is just about survival as an independent company.

Everybody is under the magnifying glass of the Electronic Arts, financially sound companies are especially tempting for Electronic Arts, because the fact that they are financially sound means that they are well managed and there will not be any managerial problems after the deal is made. Buying a company of some financial distress gives their products and rights, but also assimilates their financial difficulties. It takes time to extinguish all the small fires, because the bought company, even if their debt is paid off, will still have to straighten its ways to climb back to acceptable profitability. What if there are some problems with the management, after all they are at least partly responsible for the present condition of the company. It is quite risky, to go about and buy companies in distress. This is the background setting on which the companies are working in. Everybody is setting up tactics to evade unwanted mergers or acquisitions. Let’s take a closer look to the players, starting from the bottom.

Acclaim operated in much the same way as Electronic Arts. The only problem was that while buying publishing rights is expensive and easy, developing good titles based on those rights is expensive and hard. Acclaim wasn’t able to keep their act together and after 17 long years, finally slipped into bankruptcy. The sale of their assets will bring lots of small surprises as the competitors are fighting for the corpse. UbiSoft just lately snatched the publishing rights for mobile Bard’s Tale, which was the previous publisher.

Eidos started the amok by announcing its interest to find a buyer during the summer/spring 2004. This former pet of the stock markets had had some rough times and maybe the managers wanted to bail out, as the stock price was still relatively high. From that day on, there have been some ups and downs on Eidos’ way, but the trend is clear, nobody emerged as a valid buyer and the stock price has plummeted. Company has recently had some difficulties in their publishing schedules, which has resulted in some financial losses. The near term future looks quite challenging as the new titles are coming to the markets during the second half of the year.

Infogrames is relatively big company so it doesn’t need to watch behind its back as frequently as its smaller competitors. However, Infogrames has tremendous outstanding debt that makes it difficult for the company to make rapid changes in its business strategies. Heavy debt also helps Infogrames to keep its independence as nobody likes to buy debt. Board just accepted the suggested model to restructure the debt and now the company has managed to buy itself more time to settle the finances.

UbiSoft is a European game company, which has done everything correctly, except managed to attain satisfying financial success. It steadily puts out good titles and has grown steadily, but somehow stockholders are still unable to get satisfying interest for their investment. This company could be a nice target for company that has money and great management, which could find a new way to gush money.

Activision is almost like a small copy of the Electronic Arts. Activision is well managed and while it doesn’t pack vast amount of famous titles, it does have fare share of hits and success. The best thing in Activision is that they often manage to avoid complete flops, which is increasingly important on these days of increasing production costs. Activision has money and therefore desirable target for anyone shopping a game company that can pull its own weight. Activision has to get rid of extra cash to make some use of it and decrease the likelihood of hostile takeovers. It shouldn’t come as any surprise when they announced that they are buying a game development company.

News Corporation is big, transnational media company, best known of its Fox News. They have massive free cash reserves and are looking to expand into maturing game markets. Nobody is safe but Electronic Arts, which stock price is far above the rest.

Now lets see how this board is going to play out. It was old news that Eidos is on sale and Acclaim is in the gutter. What really sparked the speculation was the unexpected move from Electronic Arts. They secured about 20% of UbiSoft stocks. Electronic Arts calls this move a protective action, in which they just try to make sure that nobody else would snatch that tempting stack of shares. Furthermore, they claim that they are going to be good shareholders, meaning that this is not a launch for hostile takeover of UbiSoft. You know the drill, just shopping around for any spare stocks of our competitors... hah, company has to use money so that it benefits the stockholders. That is the reason, why there is more to this purchase.

UbiSoft panicked and called for assistance from all directions - Vivendi, Infogrames and French government - as nobody returned the call, they were determined to make it on their own. Rumors were in the air that Guillemot brothers, who own and manage UbiSoft, would bring their other game company Gameloft into a rescuing merger. That didn’t happen - I guess they just wanted to secure their money (they are majority owners of Gameloft, but only minority owners of UbiSoft).

While UbiSoft is hatching the plan to fend off Electronic Arts, they stall possible acquisition as much as they can. They try to stay in the limelight and put out press releases and tell about the good “new” days of glory, which will come soon. Markets weren’t impressed, the stock price was high, but it was more because of acquisition speculation. Finally came the day that we all have been waiting for – Q3 press release and phone call for analysts and investors (about week ahead of schedule – someone is rushing things).

UbiSoft did exceptionally well with their titles, but the revenues were lower than year before, because company had to postpone some of their titles after the Christmas season. However, they believe that this accounting year will outsell previous year by about ten percent. This means that they better have some stellar Q4, as the Christmas sales didn’t bring that much to the cash register. They could make it, since there are some good titles coming out from their best development teams.

The real news was that there is no news on the case of Electronic Arts. But there are some innuendos on the markets. Yves Guillemot himself spoke to London Evening Standard about not discarding possibility of buying Eidos as a defensive measure against Electronic Arts possible bid. The other tactics for defense is of course the steroid treatment of stock price. UbiSoft gave very optimistic estimates for year 2005/2006 that should support the stock price for a while and make it more expensive for Electronic Arts, should they move on with possible acquisition. This could backfire badly in about year if UbiSoft is unable to meet the estimates. Electronic Arts is not in hurry, they have money to wait it out.

What about Eidos? Even UbiSoft confirmed that they are still looking Eidos, there is no indication that this deal will ever take place. Now, UbiSoft has more things on the schedule than cozy deal making and buying Eidos. My understanding is that for the moment UbiSoft creates best value for its stockowner by creating good game titles just as they have been doing until now. It is the financials that should get brushed up to please those flickering minds of investors. First they need to put their own base in order, let’s think about those purchases a bit later.

So, can we finally figure out what will happen to Eidos? Well, maybe we can. It looks like UbiSoft is out. Vivendi and Infogrames are out for sure as they have some serious financial troubles of their own. Last thing they need is another fledging developer into their stables. They do serve their owners better if they do what UbiSoft should do – focus on titles, finances and management. It is not Activision either, as they put their money on Vicarious Visions game developer. This leads to the last piece of the puzzle the emergence of News Corporation as possible new entrant to the game markets.

News Corporation has money, it has the will and it has experience on mergers and acquisitions. They think that Electronic Arts is pricey so they might want to consider some smaller bites. Activision, Vivendi, Infogrames, UbiSoft and Eidos are on the line here, probably some others too. To my observation, News Corp. doesn’t necessarily rely on quality instead they will go for size and market coverage. To attain this objective, they will most likely do more than one acquisition (who knows about their timetable, with their money, game market is not going anywhere). In this case, it makes sense to have strong presence on both US and Europe markets. Unfortunately for Eidos, it is not exactly a strong company that could contribute as much as News Corporation requires. So in European end, the choice would be Vivendi, Infogrames and UbiSoft. I guess that Eidos is just stuck with Electronic Arts, which is just abiding its time and waiting the stock price to plummet even further. From those three might be better targets, since Electronic Arts signaled that it is interested in UbiSoft. Competitive bidding might raise the price too high.

In the American end, Activision is the best that News Corporation can do. Activision is like a mini Electronic Arts, very good company and just recently announced excellent sales. However, Activision must have its own aspirations as an independent player on the field as they purchased the game developer Vicarious Visions. Clearly Activision is looking for some bulk to go around and follows the path that it has taken in past with many other game developers that it had worked with closely. Vicarious Visions also brought interesting middleware for Activision as Vicarious Visions has Alchemy middleware technology. This deal will keep Activision trailing Electronic Arts.

Final results: News Corporation might end up with following choices: Activision/Vivendi and Activision/Infogrames. This would arrangement would toss UbiSoft and Eidos into the arms of Electronic Arts. Market would arrange itself like this:

Electronic Arts – UbiSoft – Eidos

Activision – Vivendi/Infogrames

Vivendi/Infogrames

Ok, now there is nothing to do but wait and wait some more.

Gravity Corporation

Gravity Corporation from South Korea is looking for capital. In order to fill their pockets they have filed an application with the U.S. Securities and Exchange Commission to set up an IPO on Nasdaq. Sure it's fun to follow these situations where company is located in a country where it is difficult to raise money and they therefore resort going abroad with their financial needs.

UbiSoft In A Hurry

It is fun to look at an organization under pressure. Everything is so frantic and things have to get done in the earliest possible moment. It kind of a reminds me of those occasions, when the roast is still in the oven, but the quests are already ringing the doorbell.

So what is the UbiSoft doing in their hurry? They are announcing the Christmas sales figures one week early of scheduled there are also hints in the air that they might finally shed some light on this mysterious plan on how they are going to fend off Electronic Arts. I just can't wait to see.

Electronic Arts And ESPN Deal

This is just what I spoke about. An American company taking the advantage of securing intellectual rights with their well managed cash reserves. Excellent move that surely will put some competitors to a passenger seat. After this deal, Electronic Arts will hold the rights for ESPN sports brand and name. Are there any non-EA sports left out there?

Running Out Of Time

In Telegraph, Andrew Murray-Watson wrote about the difficulties that Eidos is facing in its quest to find a buyer. I write some of my thoughts, based on that article. Eidos first announced its intentions in July. After that, they have had to update the negotiations status for several times. The sale drags on and on, nobody’s buying.

Eidos has one of the most celebrated game characters in their stables. That character is heroine Lara Croft, she has been busy in movies and advertising world. Championship Manager and Hitman are titles, which many would like to have. Commercial success for all these titles hasn’t been that stunning lately. Actually it has been almost disappointing. Anyway, all this visibility and Eidos has not been able to find a buyer.

Look at the stock price, back in 1999 company was valued to be worth of 1,5 billion pounds. Nowadays Eidos is valued around 100 million pounds. Quite a discount and still nobody makes the move.

Could it be so that buyers are just deliberately stalling their decisive moves, because it is evident that the stock price is in downward spiral? The longer the workers at Eidos feel that their jobs are threatened, the worse job they will do. All that pressure and hurry will have its mark on the job. What is the sense in stalling? In the end, it will be very cheap to buy the intellectual rights that the company has and put some new guys to lead projects. Just that this tactics has come to an end. News Corporation is out there and it can’t afford to wait for too long. They also need the people at Eidos, not just the rights, which could be fine with Electronic Arts. Which of the companies will make their move first?

I bet that the owners of Eidos will try to salvage what they can and sell to News Corp. (given that they are willing to buy) to get decent price and relatively free hands in game development, after all News Corp. doesn’t have that much expertise on that area. So, my guess is that before the summer, someone will be buying...

Running Out Of Money

Julia Fields wrote an excellent article for Sunday Herald. Article goes in to the difficulties that British game industry is facing. I won’t provide any summary, but discuss the topic freely, adding my own opinions.

Key problem is the profitability of the industry. To improve the financials, companies have jumped the trend of cutting fixed costs. This means less property and more outsourcing, with these measures, companies don’t need to tie down so much capital and they can have more flexible operation. These moves follow the lessons learned in movie industry.

Underlying difficulty for obtaining profitability is the nature of game industry. Projects can be long and they need all the staff in the company. When project comes to an end, there is typically some free time, before new project can be found. Running the operation during these times of no project to work with are very difficult to manage. Therefore outsourcing is the answer. Core group can be small and go on no matter the times, if things are getting busy, no problem just call McBain.

The industry will towards direction, where everybody has specialties. These specialist companies will be on hire and will hire extra talent to meet project demands. To me this looks like game programmer of the future will do quite standardized job over and over again. There is less room for experimentalism and artistic trials. As game programming is still rather difficult area to master, it makes me wonder how would people like to program games if it is always the same task that they are performing, why not go to financial software that is not so demanding and work hours are tolerable...

Continental Differences

Here I go again with my skewed opinions. Now I would like to point out the almost imaginary difference between the business practices of American (ok, ok, mainly Electronic Arts, I really can’t pull Acclaim into this) and European game companies. The hypothesis goes like follows: American companies pay more attention to business management like obtaining copyrights and keeping very tight financial control. European companies are more product oriented and focus on making games with a bit more originality as a flavor.

This has resulted into a situation, in which the American game companies are in fine shape and shopping around for suitable additions to their empires. European companies are a sorrier story. Financials of many European companies are less solid and product palette has variegated assortment of gems and stones.

European companies have tried to create unique products from scratch by fusing different media channels like TV, games and books, results vary, but the attempt is there to create original content. American companies have tried to secure the same multi channel results by resorting into bought copyright and following the pattern of mixing standard game ingredients into the franchised game world.

Clearly the American mix is working better and every time that European company has bought rights of any famous content franchise, they have managed to get rather good results. There is just something about that ready audience awareness that brings the cash into the box. Should everybody now rush to get as much content as possible? To me, it seems like most of the valuable and easy-to-convert rights have already been bought. Now it could be time to do something else, like joint effort from moviemakers, writers and game studios to simultaneously create content that supports the whole. That would be totally different approach, where the content in different medias would support the story from different angles and take it forward, instead of just playing the same story in different format.

Shanda Down, The9 Up

Shanda dropped, but the competitor - The9 - did not. Naturally The9 didn’t notify investors of any unexpected changes in its business activities, something like stem cell research or CRM software development. Oh, that was bit rude from me... Actually The9 had a great week, they reported to have received the right to operate The World of Warcraft online game. That surely is good news for this company, which only commercially run online game for the moment is MU.

Shanda Stock Falls

Could loose money have clouded the vision of the company? Shanda has announced that they are to move to TV, movies and print. Just a slight change into plans or what would you say?

So, instead of having clear-cut game operator in their hands, they have to worry about budding media company, which has its arms around the whole China market. This is very bad news for the investors as they put their money into a game operator. Well, those investors are clearly disappointed. Other investors, who put their money on growth company with limited risk are disappointed, because assessing the market risk just got harder.

The question is, why Shanda would like to do this kind of a stunt? I can't answer to that question, I can only guess. My guess is that Shanda feels that its financial situation is strong. Game operator business has many competitors and more are coming, they could be trying to corner a small segment that will keep them ahead the competition, since as previously noted, Shanda has already done lot of work, covering the game distribution and content issues. Third reason could be traditional one. Chinese enterprises tend to spread out to different fields according the latest whims of the owner. In time, these vast empires get chopped into pieces, but that is another story.

EA Speaks Out

Electronic Arts has spoken out about the situation with UbiSoft. EA says that they have had lots of discussions with other game companies, including Activision, UbiSoft and Eidos. So, EA is saying that they have not making hostile bid, they just happened to have the chance to buy that much talked 20% stake of UbiSoft.

News Corporation Eyes Game Industry

Is another giant forming to the game markets? According to Peter Chernin, who is the Chief Operating Officer of the company, News Corporation is seeking an acquisition in the video games market. News Corp., said Mr. Chernin, is kicking the tires of pretty much all video games companies. They have a bit of a dilemma with the divide between pricey all-in-one game companies and cheap-o all-eggs-in-one-basket game companies.

If they go for the high quality, Electronic Arts itself might be in danger. That would be nice, clean and fast sweep and News Corp. would dominate the games industry in similar manner as they do with the news. If they go for the low price, they can’t settle to one company, because the product slate won’t be variegated enough. Result would be a shopping spree. Just pulling names from the hat, maybe Activision and Eidos could be on News Corporation’s shopping list.

I welcome this development. It is always nice to get things moving, to shake up that old adage. The worst-case scenario here is that capital would summon more capital. It is really a good thing for the game industry if at least oligopoly is achieved, if no new players are introduced, EA might end up as monopoly.

Cross Media Success

It has been fascinating to follow the development of cross media or cross platform content. We have old comics that have turned into movies and games. Game characters are turning into consumer brands that can advertise almost anything. UbiSoft happily announced their latest cross-media victory as Tom Clancy’s Splinter Cell climbed to the New York Times bestseller list.

What does it really take to achieve this kind of success? Simple answer like good quality content is hardly an adequate answer. Anyway, don’t come looking answers from here, because if I knew how to make it, I would be in action already.

From game developer’s stand point the situation is increasingly difficult. Production costs are skyrocketing but the money just guarantees good graphics and sounds. Game play and the drive will be valued by the buyers and that is scary situation for developer, not even the money can guarantee the success. I will all turn into mathematics, certain average amount of games will make it and certain amount won’t. Only big will survive and the development has already started. Electronic Arts are bolstering their status by acquiring smaller companies. Other companies try to catch up, but can’t match the financial resources of Electronic Arts. We will follow, how far EA’s money suffices.

New Titles From UbiSoft

So what about those news that show UbiSoft having a future? We got two recent announcements of new titles that are called Bard’s Tale and Pippa Funnell: The Stud Farm Inheritance.

Pippa Funnell is old news, as the game will already be released during March. It is intriguing to see how the market accepts this title. For me it reads “teenage girl” all over the retail box. It seems to land into an empty slot though, so maybe it won’t be total washout.

Bard’s Tale has bit higher news factor to it, as it is a completely new project for them and quite a famous game franchise. UbiSoft will act as the publisher of the game so it will not benefit any UbiSoft’s development studios. UbiSoft was chosen to the job, because the previous publisher, Acclaim, had unfortunate fate. Still... Good job guys. Just keep on puffing and maybe enemy walls will come crumbling down.

Good News From UbiSoft

This is what UbiSoft needs, good news after another. We all now know that Prince of Persia is selling well. Furthermore we know that there are some promising prospects as what comes to merger partners. Now UbiSoft is able to paint a picture of coming, successful titles, this can not do bad for the stock price.

Expensive Game Studies

Game industry is a field that is hard to get on. Talent is desperately needed, but is hard to find. People try to find way to land a job by being enthusiasts and developing their own mini games or having relevant education. Being enthusiastic hobbyist and coding away small demos takes lot of time. Getting an education on games field is faster but very costly. Doesn’t look too promising for a company that is trying to find qualified game developers.

Video game industry program tuitions are sky-high, because there are hardly any teaching programs on the field. Supply is lacking behind the demand, because the field has developed so fast and outside traditional industries that special education and training are needed. At places, game development programs come with higher price tag than executive MBA programs.

As the game industry starts to adopt more traditional ways of making business, especially entertainment industry-like working methods, situation is bound to change, but for now, it is sellers market. This leads to the final point of this short article. Because educating qualified game developers is very costly, it is probable that developing countries, like China and India, with cheap labour are able to ramp up their education programs faster than developed countries. Yet another reason, why subcontracting to Asia will increase in game industry.

Nostalgia Joysticks

Have you come across one of those fun joystick gadgets that you can directly plug into a TV? They are now wildly popular and of this, big thanks go to the Commodore 64 that has come to the markets in such a form. It is not mere nostalgia that is creating the market demand, but the whole simplicity of the use not to mention all those fantastic classic games.

Who Wants To Buy Eidos?

According to Guardian, there was some speculation on the market that Eidos would be bought by its American rival. The deal would have given bit premium over the present stock price. However, it turned out that there was no backing with this rumour and owners of the Eidos stock had to sigh and give up their hopes. Eidos said that even the negotiations continue with a number of interested parties, there was no reason to expect fancy price.

UbiSoft And Gameloft Merger Results

This new possibility of UbiSoft and Gameloft merging... Well, it got me thinking what might lie in the future of gaming industry at least in the European gaming industry. Do you want to read, what I think?

Ok, for the starters, let’s presume that since Guillemot brothers still have such a strong grip in both UbiSoft and Gameloft, they will be able to merge the companies and the entity that comes out of this marriage is going to be financially solid and needs not to worry about outside interests.

These arrangements will probably take a good part of the year 2005, but in the end, we have a company that has video/computer and mobile games under the same roof. We will have a company that has a good product slate, which is also transferable between platforms. Electronic Arts might be making a disservice for itself by forcing UbiSoft to transform into something new. On the other hand, Electronic Arts will see the value of its share to go up and might make a sizeable profit with it in the end.

Ovum Consulting estimated the worldwide market size for mobile games to be 1,9 billion euros. This is an amount that will increasingly grab the game companies attention. I bet that as big game companies invest some more resources on the field, the old balance between operators and independent developers will suffer. It won’t a problem for a massive game company to run an operation similar to virtual operator. This area will see some interesting developments, especially in Europe, as the mobile/wireless market here is more open and more interoperable than in States.

Interesting times...

UbiSoft And Gameloft

Gameloft is UbiSoft subsidiary, which focuses on mobile games. The latest plan, as white knight offers appear to be scarce, is to merge the parent company and the subsidiary. The move is not directly related to business operations, but the ownership of UbiSoft. Guillemot brothers happen to own the majority of Gameloft's stock and whether these companies are to merger, Guillemot brothers would increase their ownership of UbiSoft to a level in which they could fend off any hostile takeovers.

Infogrames To The Rescue

Infogrames CEO Bruno Bonnell put his spoon to the UbiSoft soup. Mr. Bonnell says that UbiSoft should resist Electronic Arts plans (whatever they might be). He goes on and says that Infogrames could take part into supporting UbiSoft’s defensive battle against Electronic Arts. However, it seems improbable that Infogrames could actually do anything to help UbiSoft, because the financial future for Infogrames itself looks very shaky.

Infogrames is in a situation, in which it has to pay back 117 million euro loan that is due in July. Mr. Bonnell is betting on solution that would see the company to issue new stocks to the market, in order to collect enough capital to reorganise the loan arrangements. For now there are some dark clouds hovering over Mr. Bonnell’s plan and it is still uncertain how shareholders will respond. The worst-case scenario is that shareholders reject Mr. Bonnell’s plan and he has to resign. Not the best possible situation to start saving other companies, maybe he should first focus on pulling Infogrames through the difficulties.

Vivendi Denies Rumours

Vivendi Universal denied having interest on UbiSoft merger. UbiSoft is on its own again. All alone in the dark... ;)

But wait, there is still Disney, Atari, Take-2-Interactive, Activision... Any others?

UbiSoft Bid Twist

Real life developments are now more interesting than any game UbiSoft has published (sorry Settlers, I didn’t mean it). According CBS Market Watch (which in turn had spotted unnamed sources from French business newspaper L’Agefi that told that Vivendi and UbiSoft had some preliminary talks), the latest twist to the story comes in a form of a white knight, called Vivendi Universal. Vivendi could make a competing offer and UbiSoft stock is surging. This is the kind of publicity that UbiSoft needs if they are to block the hostile bid from Electronic Arts (hope you still remember what I said about UbiSoft’s announcement of Prince of Persia franchise sales).

There were also few analysts’ opinions in the article and it seems to be the general opinion that Electronic Arts was expected to make a move towards Eidos, which is in sort of a financial trouble and is looking for buyer. The slate of Eidos’ product portfolio is also said to fit better for Electronic Arts, while Vivendi Universal would be better match with UbiSoft. The biggest question mark appears to be the way in which Electronic Arts has made their move. According the article, game industry is very close-knit and a move without any consultation like Electronic Arts did with UbiSoft is going to be considered peculiar. As a final remark, combined Vivendi/UbiSoft would create a giant as big as Electronic Arts. From European point of view, this could be quite fun.

UbiSoft Deal Update

Some new and interesting developments have come up with the Electronic Arts and UbiSoft wrestling match. Until now UbiSoft has been cast as the unlucky underdog that Electronic Arts is harassing.

Martin Arnold wrote an article for Financial Times, which sheds new light to the situation. He suggests that Ubisoft, like so many French companies that are still controlled by their founders, suffers from poor corporate governance. This manifests itself so that after the company has beeb taken public, owners can cash in by slowly selling their stocks but retaining controlling stake at company. Selling shares compensates the lack of dividends and as a result, founders have no incentive to run the company in efficient manner.

UbiSoft seems to be a good example of this, although the Guillemot brothers own 22% of voting rights and 15% of company stocks they still rule the company board, since all the brothers sit in it. Not exactly a successful balancing act, is it?

David Radd in Game Daily wrote that Guillemot brothers own 17,5% of stock and 26,6% of voting rights, Radd’s original source was French La Tribune. The most striking new development according to this source would be that French government might intervene and stop Electronic Arts from buying UbiSoft.

I am ready to believe that French government would do something like this. Heck, I believe they could do just about anything (just my image of French politics). So, I thought that maybe somebody is counting on the possibility that just the threat would be big enough deterrent for Electronic Arts. Ah, the world of politics…

Peter Molyneux Knighted

The title says it all. Mr. Molyneux has been made an OBE (officer of the Order of the British Empire). He can thanks his contributions to the games industry for obtaining such a cool title. It sure is nice to have a royal family... By the way, does this mean that Peter has to buy an armour and a horse?

Eidos Under Talks

The Sunday Times wrote about excellent merger & acquisitions year 2004 on their business section. What was interesting in the article was the mentioning of Eidos as possible merger target during the year 2005. Just rumours, nothing solid yet. Who could pull together such a stunt, now as Electronic Arts is busy with UbiSoft? If you have any ideas, let me know.

N-Gage Arena Contest

Pocket Kingdom contest has started. People from every continent can take part into the fun. Players are pitted against each others and according to the rankings, best players are then picked and set loose among themselves. In the end there can be only one and that person will have cool "Owner of the World" title. Some actual prizes are to be grabbed too.

Artificial Life Inc.

This innovative company has few terrific products, nothing huge yet, but something that makes you think about future accomplishments that they will realize. Some of their products are:

• ecochamp
• v-girl (Best Mobile Game - Ericsson Mobile Application Awards 2004)
  
• botme
  

Their presence on Asian markets gives them the edge over most of the competition. They know the Asian consumer, but since the most important posts of the company belong to westeners, they are truly a company between east and west. Now, let's hope that the management and owners don't want to take the easy way out (company was founded 1994, so somebody might want to move on) and sell it for big money to some gigantic game company.

Happy New Year

Best of Fortunes for all of you.