EA Trying to Buy Ubisoft Shares

jujubees writes "What is going on with Electronic Arts these days? This morning it was revealed that EA is trying to acquire 19.9% of the Ubisoft shares owned by Dutch investment company Talpa Beheer B.V. If approved by the US Antitrust department, the buyout would instantly make EA the biggest shareholder, ahead of the Guillemot brothers. Whether this is a hostile takeover attempt is not clear at this point, no financial terms were disclosed." An anonymous reader also wrote in to mention a GamePro Editorial about the company, regarding its past as an honorable games-maker and its current reputation.

Comments

Hostile

[dolo666]

EA Trying to Buy Ubisoft Shares... so that they can turn Ubisoft into EA. This can not be perceived as anything but a hostile takeover, and once again, EA is becoming the worst reputed games company of our day.

Re:Hostile

[Jucius Maximus]

"This can not be perceived as anything but a hostile takeover, and once again, EA is becoming the worst reputed games company of our day."

So if EA succeeds and they are the single ubiquitous supplier and their products are a POS, it sounds to me like that's a potential for the OSS gaming market to seize the day. It's IE being attacked by FF all over again.

Re:Hostile

[DeathFlame]

I had a good long post about how open source is not for games.

But as I went along I convinced myself that I was wrong, and that open source can be better than the closed source model, even for games.

So I can only hope that one day the OSS gaming market does seize the day.

Re:Hostile

[harrkev]

Gaming is the one thing that, in my opinion, open-source cannot conquer.

How many hours per YEAR do you spend with your OS? How many hours with a word processor, web browser, or spreadsheet? The average geek needs all of those things. It is worth the effort to make those essential tools. And if a geek makes it, then he can use it. The last RPG that I played lasted all of 80 hours. I doubt that I will ever touch it again. I will just buy another one.

This is the reason that nobody can truly monopolize game creation: you only need ONE word processor, ONE web browser, and ONE operating system. But games have a high turnover rate. I would not be surprised to find people who buy more than one game a month.

So, let's assume that an awesome FOSS game came out. People would download, play, and conquer. Within two months, they are back at Best Buy looking for another game to play.

One more thing: If somebody make a game, they would likely not play it for fun, since they already know all of the quests, plot twists, etc. The only exception would be multi-player games where the challenge comes from beating other peple, instead of beating the game.

And don't forget that a word processor is a matter of programming. Making a game also involves: 2D art, 3D art, voice acting, music, and writing talent. No one person can possibly have ALL of the skills needed to make a modern game by themselves. Since you now have a lot more diverse skill mix, it becomes harder to recruit talent and to manage everything.

For all of these reaons, FOSS might be able to generate a respectable title or two, but it will NEVER replace commercial games.

Re:Hostile

[DeathFlame]

As I said, I wrote something smiliar, and I agreed with what you said. Then something came to me... what about Mods? Counterstrike anyone? While not truly an open source product, (especially now) it started with a couple guys working on a project, and now is the most widley played game on the internet. Mods are far more like open source than the original game. The turnover rate for computers games may be high, but that's due to the fact that the game ends, and the replayability is often low. If a product where open source and continually updating, changing and adding new content, the game industry could be further improved. No more paying $50 for an expansion pack. You can't tell me the will isn't there, like I said, look at mods. I can't see why closed source games are better than open source.

Re:Hostile

[realdpk]

Part of why IE is stumbling is because it wasn't being actively developed (at least, not in a publicly seen way), while Mozilla was.

EA is still actively developing new games (even though they are mostly rehashes of the same old designs).

OSS could potentially come out with new game ideas and run with them, but I don't think they'll come out ahead until EA starts seriously stagnating (not even putting out games for months at a time).

Re:Hostile

[pigscanfly.ca]

Well, if there going for 19.9% it strikes me as an investment rather than a acquisition. See accounting rules say that anything above 20% and you have to consider the other company a "subisduary" for accounting purposes. 19.9% strikes me as a deliberate attempt for them to avoid this implication.
Note: I am not an account, although I am reading slashdot when I should be studying for my AFM101 exam tommorow.

Game Company

[ValuJet]

I am going to start a game company in the hopes that EA will buy me out.

Strong Moves

[Zinic]

Looks like EA trying to knock out competition the way every other company out there would. They see a threat and want to nullify it before it becomes a serious problem to their income ratings.

Slashdot Financial Network

[Anonymous Coward]

Reading financial news from Slashdot is like watching retards drive bumper cars---it's funny, and anything but serious. Do any of you even really know or understand what a hostile takeover is? Do you understand the legalities involved?

Slashdot: Spreading Rumors and Bad Advice Since 1996

Re:Slashdot Financial Network

[nacturation]

Not only that, but Ubisoft brought it upon themselves. After all, if you give out shares it's in exchange for money. The shares are just another product which Ubi has sold to the highest bidder. Why should it matter now if EA wishes to purchase it from the current owner?

Re:Slashdot Financial Network

[EngineeringMarvel]

I'd also like to add that EA is not buying the majority of the stock, but merely would own the most stock. You cannot make company decisions with 20% of the companies stock. EA would require another 31% approval from the other stock holders to do any kind of real damage to Ubisoft.

In order for a hostile take-over to be possible, usually one entity requires atleast 50.01% of the companies stock. That is the only way they would have enough power to do whatever they want. With the most stock, however, EA would have the most power, but not THE power. Now stop panicking and over reacting...oh wait...I'm posting this on /., nevermind.

Farcry Fans rejoice !

[mbvgp]

Those hoping for sequels to farcry can rejoice if the takeover succeeds. You will now have farcry 2005, 2006, 2007 .... with just the names of the characters changed.

Great!

[lovebyte]

I am looking forward to :
Beyond Good & Evil: the NHL edition
where gamers will enjoy taking pictures of strange creatures that infect NHL players in difficult to reach parts of their bodies.

Re:is EA..

[Mikail]

True, there are indie games, but they rarely have the resources (human and financial) that EA does now. There are some great indie games, but they still face the challenge of marketing/publishing their game to turn a profit.

My beef with EA (and Vivendi) is they're buying up companies that did make innovative games. Then they either dismantle the companies or take all the credit when good games do come out.

I'm fresh out of college and looking for a job in gaming, but it's hard to find companies that inspire me like Interplay and Sierra did while I was growing up. They've been bought and destroyed or assimilated by EA and Vivendi.

Sad Times

[ZephyrXero]

It is a very sad time for EA right now. I saw a "history of video games" type show on GSN a few months ago. On it, they had some of the original guys from Electronic Arts... they talked about how EA was formed to give developers more freedom, and to make better games. It was founded on the idea that one day video games could be considered an art form. Hearing that almost made me cry. EA is just about the worst comapany against all those things it once stood for. I'm glad to see people are finally realizing what EA's really like, even though I've been saying it (and boycotting) for years...

Re:Sad Times

[Black Pete]

How does EA's competitive business practice make their games worse?

Mainly because their main business model is cashing in on sequels to hit titles. Take a look at the reviews of the original hit titles (review in the 90's), then look at the sequels and their average reviews (80's, then 70's, then 60's...) For examples, see:
NHL 2005 - http://www.metacritic.com/games/platforms/xbox/nhl 2005/
Goldeneye 2 - http://www.metacritic.com/games/platforms/xbox/gol deneyerogueagent/
Urbz (aka The Sims 2.5) - http://www.metacritic.com/games/platforms/ps2/urbz /
Fifa 2005 - http://www.metacritic.com/games/platforms/gamecube /fifasoccer2005/

And so on. Madden review scores are all over the roadmap, but now that they have the exclusive NFL license, do you seriously expect the quality to go up? Granted, there are some exceptions and there are excellent sequels, such as SSX3, but they are generally in the minority. An average rating in the 70's still isn't too shabby, but it's not fantastic either.

If there's one thing you can count on from EA, it's sequels. Lots of them. Which brings up the next point... innovation.

Unless a sequel radically changes the gameplay mechanics (and they usually don't), it cannot be considered innovative to cash in on an existing brand name. Not that there's anything wrong with that since they do have to please their shareholders. However, sequels dilute brand names and make them worthless over time (how excited can you get about another Sims game now?)

As for original hit titles, there are very very few original hit titles that EA actually created themselves (only SSX springs to mind in recent history). They generally acquire companies who have already made the initial risk in putting out a proven hit title, then generate endless sequels, as long as it remains profitable. This is their business practice. They play it safe, don't innovate (much), and focus on making as much money as possible.

Meanwhile through all the acquisitions, we end up having fewer and fewer companies likely to put out original titles, which could've been hits or not. And now we'll never know.

That is why EA is generally reviled - we love creativity and innovation, and we hate to see potientials being lost (regardless of whether it actually makes money or not). Rez and Beyond Good and Evil are excellent titles that never got the attention they deserved and were money losers, yet there are some of us who loved these titles and want to see more. EA isn't a likely source of such titles.

Re:Someones gotta start it

[jred]

You ought to use the euro symbol instead...

Freeman

[warmgun]

Its for precisecly this reason that Gordon Freeman represents the true Free Man. Valve's present business model could rock the foundation of the gamining industry. A small dedicated group of programmers and artists will turn out a quality product, and thanks to the internet, be able to recoup 100% of the sales revenue. The giant conglomerates will continute to turn out half-hearted sequels to their library of properties. Its only a matter of time till EA becomes obsolete.

Re:Freeman

[zorg50]

I'm pretty sure they removed the CD check. Vivendi probably required it to begin with; I doubt it's Valve's fault.

Re:EA disease is spreading

[Blue-Footed Boobie]

I wish I could mod you down.

To STOP supporting Ubi now is just stupid, and will hurt Ubi (who I feel make great games).

Stop buying from them if EA ever owns/buys Ubi.

Stroke, Stroke

[retinaburn]

Simple reasoning, EA just needs fresh rowers, and Ubisoft has proved to have some pretty good oarsmen. Avast ye scurvy dogs!

Re:All Hail the Crumbling Game Industry

[SenorPez]

Can anyone say Splinter Cell: 2007 Edition?

In other news, EA reached a licensing deal with the CIA. They now have exclusive rights to publish stealth action games. EA's progammers claimed their future games would have 25% fewer glitches and bugs than previous offerings, meaning online play would simply be "unplayable" due to cheating instead of "completely unplayable."

Its only 20% ownship, not 100%

[krbvroc1]

I'm not sure how approaching someone to purchase a 20% stake is considered by some as a hostile takeover.

As far as employment goes, if you recall previous stories, many developers left Ubisoft to work at EA. In fact, Ubisoft was one of the companies who sued the employees claiming they should not be allowed to work for a competitor in the game industry since they signed a non-compete clause.

In the bigger picture, this consolidation is inevitable and it sucks. With the recent article about the Game Industry overtaking Hollywood, those same business techniques will be used. Expect little innovation. They will do what they think will work without risk (ie; Halo 3, Far Cry 2, WOW 2, Doom 4, expansion packs). Just like the movie/television industry...find a hit with something, cookie cutter it, and sell it until everyone was sick of it a year ago.

Personally, I've never been a fan of EA games - partly because I don't care for the sports genre, but partly because EA's model seems to be; release the same game yearly with some tweaks. ie; 2001, 2002, 2003, 2004, 2005. It similar to the Intuit/Quicken model. Release to generate a steady revenue stream, not because of innovation.

Re:Its only 20% ownship, not 100%

[Dark Paladin]

It's the way stock ownership works - votes are based on percentages.

Take Ubisoft. With EA getting 20% of the stock, that means when the company takes votes on what to do, EA has 20% of the vote right there. Increase employee hours without overtime pay? EA has 20% of the vote, and so they only need to convince 30% of the total shareholders that they're right. (And usually, you can convince 1 out of 3 people that any stupid idea is right.)

They don't need 100% - just "enough".

20% is not enough to completely rule a company, but it's large enough to seriously influence decisions - which could be construed as a "takeover".

Re:Its only 20% ownship, not 100%

[Richard_at_work]

Basically, if the 20% EA purchases in Ubisoft is the largest single block of voting shares in the company held by one person or entity, then that person or entity can force AGM votes etc to go its own way, have people put on the board of directors and other things which having a controlling share brings. Also EA may be silently purchasing shares from private sellers on the stock market, which will further increase its controlling share.

Its possible to have a majority share in a company which is below 50%, but you run the risk of the rest of the shareholders banding together to vote against you, which is why a 51% share is considered better than a smaller share. You can still control a company with a 20% share, but the risk is there that you will loose that majority without actually doing anything.

For this to be considered a hostile takeover, EA has to be talking to and buying from third party shareholders directly, and not the company itself. If EA can gain a percentage share which is larger than that of the companies own, then the company has basically been taken over, without ever being approached. A standard takeover is where the company or the majority shareholder sells its stake to someone else.

Remember folks, once you put more than 50% of your shares out in the open, you no longer own the company.

Re:Its only 20% ownship, not 100%

[Tim C]

It depends on how many shares the Guillemots have though - if they have only one or two percent less, then they too only have to convince a little more than 1 in 3 people to back them.

Of course, if the Guillemots have much less - say only 5% or so - then it's a different matter.

Re:Its only 20% ownship, not 100%

[krbvroc1]

It depends on how many shares the Guillemots have though

According to their 2004 financial report, available on the ubisoft website, the Guillemots own around 14-15% of the company. 84-85% is owned by the public. This deal would appear to give EA more ownership than the Guillemots -- of course the financial details are not being disclosed yet. For all we know, it is the Guillemots who are selling to EA (along with some board members). There has been no comment by either company yet.

Re:Ugh..

[Freexe]

you never played typing of the dead then!

You know times are bad...

[FortKnox]

... when you are rooting for the Microsoft Gaming Companies to outdo the EA gaming companies profts.

Offtopic? WTF?

[Spy der Mann]

OK who was the moron who modded this offtopic? It's a COMPLETELY valid point. Meaning that EA is like this hungry corporate monster who wants to swallow the small fish.

Remember the tragedy of Yahoo buying geocities now known as "geoshitties" by its former users?

UBIsoft is an excellent small software company. When I play Prince of Persia: Sands of Time, I remember good ol' times of Epyx. New, original games, maybe with some flaws.

And then comes the walmart-mindset megacompany and wants to ruin it.

So please, MOD PARENT UP.

Gamepro Editorial

[mrseigen]

I don't think they really "get" the latest reasons everyone hates EA. They're buying out everyone in sight, burning out their coders, and casting them inside. They hire students out of college with ideals and goals in life, burn them out, and cast them aside as well.

This isn't about originality, how original can you make a fucking sports game anyway?

(Speedball and Mutant League * fans -- I love them too. They're not sports sims. Sorry)

Re:Gamepro Editorial

[akisugawara]

Being the dude who wrote the editorial, I'd like to point out something: The fact that games aren't original directly ties in to how EA treats its employees. But first, tech companies burning out their employees isn't new at all--big companies like Intel and Motorola routinely do it by hiring college grads and waving high salaries. So EA getting the wrap for being the most evil company in the world isn't exactly accurate. The only reason why you don't see such blogs getting recognition is because it's (sadly) in other tech fields and accepted as something that comes along with the job. It's a newer phenomena for video games. I think you're missing a point that was inferred from the article either--games *are* getting crappy *because* they are burning out the employees. How do you think a game such as Golden Eye: Rogue Agent has a 9-month dev time? Most games start out with high ambitions of being the next greatest thing. Penny-pinching EA puts a strangle hold on innovation because of the bottom line--enforcing insanely short development times and irresponsible work hours. Hence the mediocrity of Medal of Honor: Rising Sun and Pacific Assault. Or even Battle for Middle-Earth, which was a great game but didn't fully live up to its expectations. Originally the game was supposed to have morale, with human foot soldiers backing away as Trolls approached on their positions. That's the exact reason why the original Medal of Honor people left and created Call of Duty (though they haven't publically acknowledged it) Most, if not all EA games have really short dev times--when's the last time you heard a game that they spend 2-3 years developing on?

The games industry is the movie industry

[Infonaut]

Expect a lot of this sort of hardball behavior to become the norm in the games industry, if it isn't already.

As we all now know, the games industry is huge - bigger than Hollywood. Well, look at how Hollywood studios have acted over the years, and recognize that the halcyon days of the games industry are gone. It's Big Business, and if you look at how games are marketed and distributed, it's a sophisticated moneymaking machine where creativity runs a distant second to pulling in big dough.

People complain about movies being derivative, formulaic, and obsessed with sequels. The movies have nothing on the games industry. It's becoming more and more risk-averse every day.

Re:EA disease is spreading

[ansak]

It's a little soon to boycott Ubi. Buying from them now may help the share-holders other than EA stave off demands to change the board and the direction.

Of course EA wants to buy out or squeeze out the competition. The most pertinent remaining question for us as individuals is what'll we do to help out the folks whose lives will be disrupted as a result of the carnage. "When they came for the... because I was not a..." but in another form.

Human compassion is the only defence against the bestial appetite of the large corporation for devouring all surrounding worlds. Are you up for it?

Other than that, I hope Cyan (the Millers et al.) have an "out" in their contract and can find another distributor. I can't imagine what'll do more to destroy Myst than the "Myst-2006" approach to new titles.

cheers...ank

"source available" != Open Source != Free Software

[FreeUser]

Open Source is great for games. Many people get confused and think that because you have an open source game, people can get it for free. You don't have to use the GPL to be open source.

This is true.

If they would just include the source with your game, and allow you to edit it for your own purposes, but not redistribute it, it would still be open source, by definition.

I'd check the definition of open source again. Certainly this would not be software libre (free as in freedom software), and I believe restricting redistribution disqualifies a license from meeting the open source definition as well (though I haven't kept up on the open source folks current guidelines, so I could be wrong).

The GPL'ing of game engines on the other hand is a great idea.

I think you could achieve what you're suggesting by GPLing the game source (engine) and the game logic perhaps, but retaining all of your rights to the ARTWORK (which would arguably include not just sprites and sets, but also level maps, etc.). In this way you gain all of the advantages of free software with respect to debugging the gaming software, but retain a branded product you can sell. You could even release for free the first 25% of the game to hook folks a la Id (they did this with doom, quake et al very successfully).

Of course, you may find yourself competing with folks who make 3rd party knockoffs that run on your game engine and with your game logic ... that is a downside, although if your artwork and level design is superior, that may not be a big issue.

Certainly artwork is a labor intensive part of designing games (perhaps THE labor intensive part these days), and while a Creative Commons approach to artwork (and film, for that matter) is likely to emerge in the future, certainly in today's environment you could do something like the above quite successfully I suspect.

GarageGames.com

[webzombie]

Well it looks like the more idiots buy these horrible excuses for games being pumped out by EA the bigger and nastier they get.

Look, there is NO NEED for big distribution/development companies like EA any more. With the internet and the relatively inexpensive technologies available any programmer/level designer with marginal abilities should be able to turn out games at least as playable as most of the cookie-cutter garbage hitting the streets.

Gaming and game development need an open source alternative and strategy or else we'll just be fighting another M$ only this one pimps games.

What's going on indeed...

[jayhawk88]

Five years ago, deep inside EA's secret underground lair.

Number 2: Dr. Evil, I'd like to take a moment to bring you up to speed on our Evil Empire. Do you remember Tripp Hawkins, one of your Evil Agents?
Dr. Evil: Yes, of course, Mr. Hawkins. A wirery fellow...always talking about skateboarding. Smelled of oregano.
Number 2: Yes. As you may recall, Mr. Hawkins was charged with creating a way to brainwash the minds of school children...
Dr. Evil: Ah yes, Project Marcy Playground! Control the minds of school children, have them steal money and valuables from their parents, to fund our Evil Research. Progress?
Number 2: Actually, the brainwashing aspect of the project was dropped years ago, after Mr. Hawkins learned that there was much more money and control to be had making a new form of entertainment, called video games. In the past 15 years, video games have become the most popular form of entertainment in children and young adults, and Mr. Hawkins company Electronic Arts has become the dominate force in the industry.
Dr. Evil: No brainwashing?
Number 2: No sir, it's quite unnecessary. Video games are so popular we control the purchasing habits of children without the need for drugs or hypersonic waves. Parents buy the games for their children willingly, and the operation is entirely legitimate. So far EA has made over $12 billion for our Evil Research Laboratories, and we estimate a 15% annual increase in those numbers over the next 20 years. The profit potential is almost unlimited!
Dr. Evil: .....You just don't get it, do you Number 2?
Number 2: Excuse me, sir?
Dr. Evil: SILENCE! Eliminate Mr. Hawkins, inform all EA employees they will be receiving mandatory overtime and 10% pay cuts, begin eliminating our competition using underhanded business techniques, and ensure that the most loved of these "video games" are driven into the ground by failing quality and shoddy licensing deals!

Holy smoking ruins Batman!

[mestreBimba]

This totally explains what happened to Acclaim!!

Dr. Evil: Make the next Dave Mira game XXX. I want fem-bots with feakin laser bames on their jibblies.

Sports?

[Mildog]

I can see your point, but I think there is one area where this is viable: sports. You spend a lot of time developing a strong game engine. Then, rosters, create-a-team, create-a-player, different playbooks, different plays, etc. can all be created, keeping the game fresh.

(yes, I'm trying to find a place to stick another comma)

Why Bash

[flogger]

I'm seeing a lot of Bashing going on for both EA and Ubisoft. What gives? Both produce/distribute great games. (Do they really make thier own games?) Currently on my hard drive I have by EA: Battlefield 1942 and MAdden 2004. On My harddrive from Ubisoft is IL2 forgotten battles and (or whatever the expansion is called). I am hoping some good will come out of this: I cannot stand the patching system for IL2 and the ability to play online... Anyone who has tried to play online with IL@ knows this. Madden and BF1942 online are easy. Maybe if nothing else there can still be great games with a more streamlined method of finding online opponents and patches.

I have to agree

[ElMiguel]

Even Freeciv, that is one of the usual examples of "bigger" FOSS games, is sorely lacking in the art department. There's barely any people with artistic skills contributing to FOSS games. If there was, though, it would be a different story, but the situation does not seem likely to change any time soon.