Electronic Arts May Buy Ubisoft
Noted Wedbush Morgan industry analyst Michael Pachter has announced to investors that Wedbush Morgan has begun in-depth coverage of Ubisoft, along with its continuing coverage of other major game publishers such as Electronic Arts, Activision, and THQ. Based on Ubisoft’s heavy early investment in development for the new current-gen platforms and strong brands, Pachter puts Ubisoft stock at “buy” status, despite the company’s recent losses.
One particularly interesting aspect of the investor note comes when Pachter addresses EA’s 2004 purchase of a 20% stake in Ubisoft. Seeing little point in EA keeping its minority shareholder position without taking further action, Pachter recommends EA either complete the acquisition of the company, or sell off its stock. “In our view, EA shareholders can decide individually whether an investment in Ubisoft is prudent (and of course, we think it is),” he wrote. “We therefore believe that EA should either complete its acquisition of Ubisoft or divest of its minority interest. With approximately $2.4 billion in cash, EA could complete its acquisition of Ubisoft at any time.”
Last year, Ubisoft CEO Yves Guillemote admitted that if EA is committed to acquiring Ubisoft, the French publisher would have little recourse. “We are not safe from a hostile action from Electronic Arts,” he said.
If you haven’t already, make sure to read the section on EA in the latest Next-Gen Infowar article, it’ll give you some more history on this situation. Ubisoft has said several times they would like to be bought out, but not by EA, they have even specifically hinted to Microsoft that they would like them to be the buyer. Earlier this year Ubisoft made every future Splinter Cell completely exclusive to the Xbox 360 as well. This is a dire situation, and even though there’s not much we can do besides continue to not purchase EA games, you can also try signing this petition.
December 18th, 2006 at 1:58 pm
I pray that this does not happen, because that would be horrible. The Splinter Cell series would probaly stop, and then EA would have even more power and continue to buy more companies.
December 18th, 2006 at 2:16 pm
I can’t stand EA. With them comes the loss of innovation and constant re-hashes…nothing could be worse for a company than a EA buy-out. Ubi is a Top Tier developer in my eyes, a developer who has great ideas and makes a good product. Everything that you like about a company, everything you expect from a company is tossed out the window when EA gets involved.
December 18th, 2006 at 2:23 pm
Signed the petition, hope it works. I can’t think of anything worse to happen to a great company. We all know that with the EA label comes the loss of creativity and innovation something Ubisoft is known for. Hope that maybe the petition opens some eyes, wouldn’t that be great if MS bought out Ubisoft? o_O my face would explode if that happend.
December 18th, 2006 at 2:53 pm
You could bet that sequel to Beyond Good & Evil they are working on would be the first thing canceled.
December 19th, 2006 at 12:15 am
Yeah, that’s what I really hate about EA. For them, it’s all about the bottom line, and that’s why they continue to crank out the same game year after year, franchise after franchise. They find something that works, and then just beat it to death until it becomes just another typical EA game. A game like Beyond Good & Evil just doesn’t work with that strategy because it was not as widely popular initially even though it was a really cool, unique game. EA just would not be willing to take the risk on an IP like BG&E and would certainly cut it in favor of another generic sports/racing title.
Now with Ubisoft in general, I can understand why EA is hungry to get ahold of them. Ubisoft, like EA, relies heavily on time-tested franchises like Splinter Cell, Ghost Recon, Rainbow Six, etc. The major difference is that Ubisoft actually continues to keep the production values high from game to game. Each iteration is generally a decent step forward in gameplay innovations, better online features, etc. I am really leery of the effects of an EA buyout on some of my favorite franchises in terms of production values, particularly.
December 20th, 2006 at 7:59 am
I wish Microsoft would buy them before EA does.