Is Ubisoft Headed to the Chopping Block?
In a predictable development, Ubisoft is being targeted for acquisition by private equity firms KKR and Blackstone, according to Kotaku’s interviews with employees. Consolidation is all the rage today, and the last few years for Ubisoft resemble an attempt to win as “What Not to Do Bingo,” from sexual harassment issues and high employee turnover to uninspired games and predictably terrible decisions (looking at you, NFTs).
Will Someone Ride to the Rescue?
These developments could spur other gaming companies to acquire Ubisoft.
- Sony: Ubisoft would offer a shot in the arm to Sony’s multiplayer title production
- PlayStation, however, does not have quite the deep pockets of Microsoft
- Microsoft: Xbox is on a buying spree
- But Ubisoft hasn’t made “Activision-Blizzard money” in recent years
- The Activision deal is far from done, and Xbox likely doesn’t want the headache of Ubisoft’s considerable baggage
Not all Mergers are Good
A potential acquisition by private equity doesn’t bode well for Ubisoft. They’re going to want a return on investment immediately, and in an industry where developing AAA titles takes the better part of a decade, this means cost-cutting. Expect mass layoffs and pulling the plug on life support for some of Ubisoft’s stalled titles, such as Skull & Bones. In other words, Chapter 1 of the standard private equity post-acquisition playbook. And don’t be surprised if Ubisoft pawns off its venerable but dated Tom Clancy IP for video games.
If there is some good to come from this, perhaps this episode will be a wakeup to an industry that’s often favored iteration and short-term returns over quality products and releases.