French game-maker seeking to rebuff Vivendi takeover bid
Ubisoft's "Assassin’s Creed Origins" boosts sales, propels shares
The holiday period is shaping up to be a game changer in Ubisoft Entertainment’s fight to stay independent from Vivendi.
The latest installment of the French gamemaker’s top-selling franchise, “Assassin’s Creed Origins,” is picking up rave reviews and showing strong sales through Christmas, which could further propel shares that have already almost doubled this year on the back of an excellent start since the game’s October release.
The stock’s rich valuation is a barrier to any attempt by Ubisoft’s top shareholder Vivendi to pursue a hostile bid for the 73 per cent it doesn’t already own. Ubisoft shares are worth four times more than when the media conglomerate run by Chairman Vincent Bollore started to acquire the stock in 2015.
“Given the current sales trend, ‘Assassin’s Creed’ will stay in the top three for the Christmas period,” said Olivier Garcia, head of commercial development at French retail electronics chain Fnac. Sales have stayed “very strong,” putting the game third, behind soccer simulation “Fifa 2018” and first-person shooter “Call of Duty: WWII,” he said.
In the UK, the game ranked fifth in entertainment software for the week ended Dec. 16, according to GFK Chart-Track data.
Strong sales have been boosted by glowing user reviews. On average, the game received an 85 per cent positive rating since its launch, based on more than 17,000 reviews on PC online game platform Steam.
“Assassin’s Creed” is part of an elite group of franchises that have each sold more than 100 million copies, which includes “Grand Theft Auto,” “Fifa” and “Super Mario Bros.” Retailing at about US$50, the newest game from the action-adventure blockbuster sets the player in ancient Egypt exploring the pyramids, uncovering tombs containing mummies and pharaohs. A photo mode lets the player capture shots they can share on social media.
Although Ubisoft won’t share sales data before February, it has hinted that the extra time it spent on the design before releasing the game has paid off. Shortly after the Oct. 27 release, chief executive Yves Guillemot said the game’s sales were trending at twice the pace of its predecessor and chief financial officer Alain Martinez said Dec. 7 the game had continued its positive trajectory.
Gamemakers including Ubisoft typically rely on the release of one or two games a year and Ubisoft is milking “Assassin’s Creed Origins” for all it’s worth. Robust sales of the game, including digital versions played on computers and higher revenue from older, back-catalog Ubisoft games allowed the company earlier this month to announce it will delay some future titles, while maintaining its profit outlook.
Ubisoft is generating more recurring revenue from its games as customers on computers and consoles increasingly buy higher-margin digital copies and stick with them by paying for subscriptions, regular updates and in-game perks. In “Assassin’s Creed Origins,” players can complete quests or choose to pay real money to equip their character with special gear, including a gladiator-themed look.
In the first-half of the 2018 fiscal year, Ubisoft’s back-catalog sales grew 48 per cent and the company’s digital revenue increased 69 per cent.
The traction of “Assassin’s Creed Origins” with digital sales is part of a growing trend that’s paying off for gamemakers, Matthew Kanterman, an analyst at Bloomberg Intelligence, said by email.
“This is an industry shift for console games that still has a long way to go, but as it gains pace, as it seems to have done lately, it also is a tailwind for profitability,” Mr Kanterman said. The resulting increase in valuation “may act as a deterrent to Vivendi launching a tender offer.”