Consolidation in the gaming industry: Myth or Reality?

The endless saga of Ubisoft hostile takeover continues. As recently reported Gmbox , French media conglomerate Vivendi intends to fully absorb the famous video game company before the end of this year. Such information is divided Reuters citing its own sources.

Why is this event is given so much attention? What is it – a single large transaction with a scandalous story, or is it a global trend? If the latter, what is due? Let’s try to answer all these questions.

Last summer, Vivendi gained control of Gameloft, and since the market froze, waiting for the French giant strike next on sovereignty Guillemot family assets.

Earlier, when they are still interested in the company Electronic Arts, Gameloft called “poison pill” that Ubisoft had to swallow in case of a potential hostile takeover, to save the asset. But, as we know, this did not materialize, and now Ubisoft itself is under attack.

Many regard it as a real corporate drama, and our colleagues from gamesindustry.biz even compare the events surrounding the absorption Ubisoft French arthouse cinema. Some, in particular, fear that after the acquisition the company will not be able to produce a truly original game, and sensitive surveillance by Vivendi will hamper development.

In reality at Vivendi great experience creative management of companies, and tend to conglomerate gives his players a lot of freedom, so that they continued to issue masterpieces. In other words, under the wing of the case Ubisoft Vivendi likely to go very well, but why did this transaction care of someone other than the board of directors and lawyers who want to earn their own hard-earned immodest?

The transaction Vivendi and Ubisoft attracts so much attention for the reason that this is not an isolated incident, but part of a major trend in the industry, which recently gaining momentum all the more active pace. Exemplary strategy in terms of mergers and acquisitions demonstrates, of course, the Chinese media conglomerate Tencent.

This player deliberately buys stake in assets or absorbs video game company as a whole. And businessmen from China aimed at the most successful representatives of the industry, and now they have managed to collect quite an impressive portfolio of assets .

In early 2011, Tencent bought a controlling stake in Riot Games shares. Later, the company reported that the transaction was approximately $ 231 million. In December 2015 the American developer Tencent sold the remaining shares.

Main brainchild of Riot Games – MOBA League of Legends – still it does not just bring considerable profits to the Chinese owner, but also the most profitable PC game in the world. During 2015 the game was able to raise $ 1.63 billion, becoming the undisputed leader. In 2016 LoL retained the championship and even improve the results, earning $ 1.7 billion.

Last year, Tencent bought Finnish mobile developer Supercell games. In order to take possession of the asset, the company had purchased from the Japanese SoftBank 73% stake in the studio, for which in 2015 earned $ 1.35 billion in net income. All business Supercell analysts estimate at $ 10.2 billion, the transaction is valued at approximately $ 8.6 billion.

At the time, in a relatively distant 2013, SoftBank acquired a 51% Supercell for $ 1.53 billion, and in 2015 increased its share to 73%. The amount of the second deal remained a secret. According to the publication the assessment The Wall Street Journal, then the Finnish developer is estimated at $ 5.25 billion.

After the purchase of a controlling stake Supercell company Tencent became the owner of two of the most profitable in the world of video games – Clash of Clans and the League of Legends .

According to some Chinese conglomerate criteria can be called the largest company in the video game industry. And it is noteworthy that the majority of users of Tencent products, most likely never heard of such a company, and they have no idea of who is behind their favorite titles.

Many gamers still do not see the movement of the tectonic plates igrostroya, while consolidation captures the video game industry. Is it good or bad – yet too early to judge, but it is obvious that the market is ripe for action.

It is interesting that with the purchase Ubisoft Vivendi will return to video games, because until 2013, the company owned by Activision Blizzard. The market situation and the story itself Vivendi said that the company, like Tencent, is created to hold the other.

Other such companies operate on a similar scheme, including Softbank, Facebook and others. Japanese investors are also known to most people as a telecommunications company, but it has a huge number of game titles. The company Mark Zuckerberg is also partially lit in gaming, becoming the owner of Oculus in 2014. There is already a question of an entirely new technology – VR – to which the video game market has yet to get used to.