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Electronic Arts buys stake in Ubisoft in "hostile" act

EA now owns almost 20 percent stake in competitor, says it intends to be "very good shareholders." Ubisoft sends mixed messages.

French game maker Ubisoft got an extra shot of espresso in its morning coffee today. In the early hours in New York, well before the markets in France had closed, Electronic Arts announced it had completed a transaction with European investment firm Talpa Beheer BV for a block of shares equivalent to 19.9 percent of Ubisoft Entertainment.

As a result, one of Ubisoft's chief competitors now owns the second most sizable voting block of its shares. The one larger block of voting shares is owned by the Guillemot family, Ubisoft's founders, who control 22.8 percent of the company.

"We intend to be very good shareholders, not necessarily activists," EA vice president of corporate communications Jeff Brown told GameSpot this morning. Brown also indicated that an SEC review of the transaction is required, as are subsequent filings in France.

Questions as to EA's goals are slowly coming into view, but for the time being, both parties are downplaying the news as business as usual. In an e-mail sent from Ubisoft president Yves Guillemot today to "Managers Worldwide," he said the deal "emphasizes the strategic importance of Ubisoft's position in the video game industry." Smoothing the shock further, he added: "Thanks to the strength of its studios and brands, Ubisoft is in the strongest position amidst all publishers to meet the challenge of the transition to next generation consoles. This is why we attract the active interest of our competitors."

However, Guillemot's e-mail differed sharply from statements a Ubisoft rep gave Reuters. The spokesman told the news service that "Pending further information, we consider this operation as hostile." He added, "We think this operation is aimed at securing the studios of Ubisoft that are ready to face the next generation of gaming consoles."

Sources told GameSpot today that Ubi officials learned of the stock acquisition only after reading about it online, although Brown said the two companies had addressed the possibility of such a purchase previously. "We have had discussions with them prior to today."

According to Brown, it was known that the block of shares were soon to be sold by Talpa Beheer. "Their shares were going to come on to the market. We knew Talpa was going to sell these, we knew there were a number of entities that were interested in purchasing the shares and we decided it would be best for us to have them." He further elaborated on the reasons behind the transaction, saying, "We think it's a good company and well-managed."

As for how EA may decide to use its newly acquired influence, Brown said, "We are preserving our options in the future."

"There's nothing here that calls for any cooperation in any of their publishing or development [activities]," Brown said. So, is EA going to enter the decision-making process for the next Prince of Persia, for example? Brown said that would be highly unlikely. "Of course, the answer is no. This is a financial transaction."

By Curt Feldman -- GameSpot

POSTED: 12/20/04 11:50 AM PST

Electronic Arts buys stake in Ubisoft in "hostile" act

Well, first they pay what was rumored to be between $300 million and $1 billion for the exclusive NFL and NFLPA rights, now they buy 20% in a competitor. I never had a problem with EA before, liked their NBA/NFL street and always been a huge fan of the Need For Speed series, but I think their going too far now. Owning the 2nd largest voting share of the company? Great, whats next...vetoing the next Splinter Cell game? On the opposite side, I read somewhere that now that they own the NFL videogame market, their considering dropping the Madden license

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EA has become the biggest heel in the gaming industry, trying to turn itself into the Wal-Mart of game companies. Then again, just as I just bought a DVD from Wal-Mart just a bit ago, I'll probably still check out EA's games.

Still though, this sucks.

Edited by TheROC-Revolt
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It might not, but it's showing a horrible habit that I hope EA doesn't keep up.

True, but they probably will. EA is a powerhouse, and they obviously want to be the only third party developer in town. This could of course be stopped if someone in the government had an ounce of soul.

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EA is pure evil. Their talk about not interfering with Ubisoft's games is total PR bullshit. We're supposed to think that they bought the stock just so they could have the certificates framed on their wall? Christ. My boycott of EA is seeming like a better ideas as weeks pass, and here's hoping that the federal government nails their ass on every labor law in the book.

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here's hoping that the federal government nails their ass on every labor law in the book.

You know they won't. This is the government we're talking about... if you work for a major corporation, getting overtime pay is like pulling teeth from a tiger. I know firsthand, I work for Viacom. EA treats their employees like shit and will continue to do so because the government not only turns a blind eye to it, most officials encourage it in their own businesses. People wonder why EA's game quality has been going down, it's not because the talents not there, it's probably because they're disgruntled. An EA boycott would be hopeless since in probably 10-20 years, they'll be the only major third party left.

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I hated EA with a passion after reading what they did with the Exclusive NFL rights, now I'm even more pissed. I've always loved Ubisoft.

I just hope to god that EA doesn't start changing Ubisofts games. EA will probably end up changing Splinter Cell's main character from Sam Fisher to Kobe Bryant, he's much more marketable.

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EA is trying to monopolize the Video Game industry like Microsoft monopolizes the Operating System business.

Personally I don't really see the logic in this as EA and Ubisoft don't really make the same type of games, the only Ubisoft game that would have possibly competed with EA was the And1 Basketball game competing with NBA Street.

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Guest UmpireAJS

EA IS the Microsoft of gaming industry-Buying out companies mercilessly,getting their employees to work for like 24 hours a day, and paying them as low as possible.... Horrible. But I still like their games.

EA doesn't care if UbiSoft makes same games or not. UbiSoft COULD HAVE any day created EA competition games [thats what EA thinks anyway]. Plus the Action market,EA is trying to enter [battlefield 1942, Medal of Honor and stuff], have a particularly good presence by Ubisoft [Far Cry]

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