Ubisoft can play its own game amid M&A surge as metaverse opportunities arise, CEO says

The maker of the “Assassin’s Creed" videogame series has been watching from the sidelines as rivals have engaged in a flurry of deal-making over the last few weeks that has been a sign of the confidence in gaming’s potential as companies race to build the metaverse-a virtual world in which users can play, work and shop across different platforms using digital avatars.

The total value of deals made in the industry in January 2022 alone was more than for the whole of 2021, Citi analysts said in a note. Take-Two Interactive Software Inc. agreed to buy Zynga Inc. for about $11 billion. Microsoft Corp. agreed to buy Activision Blizzard Inc. in an all-cash deal valued at roughly $75 billion, and Sony Group Corp.’s videogame unit struck a deal to buy Bungie Inc. in a deal valued at $3.6 billion.

“All of this activity highlights why the videogame industry is the most exciting industry to be in right now," Mr. Guillemot told The Wall Street Journal, describing videogames as the fastest-growing sector in entertainment.

Mr. Guillemot said separately during an earnings call on Thursday that Ubisoft is able to remain independent, citing its financial strength and game portfolio. However, he said that if any offer was received, it would be reviewed with the interests of stakeholders in mind.

Citi analysts have said that while there is no sign of direct interest in Ubisoft, the company could potentially become a target given its attractive content library. Aside from “Assassin’s Creed," Ubisoft’s stable also includes the “Just Dance," “Tom Clancy’s," “Far Cry," “For Honor," and “Watch Dogs" franchises.

“We have the scale needed to continue delivering great entertainment to players and generating long-term value for stakeholders," Mr. Guillemot told the Journal.

Investment banking firm Drake Star Partners Ltd. said 2022 could bring more than $150 billion in deals to the sector, up from $85 billion last year. The major deals at the start of the year followed on from a boom in the videogame business during the coronavirus pandemic, when engagement jumped as users spent more time in their homes due to lockdowns.

Companies are also jockeying for position in the metaverse, since technology giants aiming to build the new virtual ecosystem are expected to first have to master all aspects of videogaming.

“We see the metaverse-or metaverses, since there are likely to be many-as an extension and evolution of what videogame worlds already offer today. For companies looking to build a metaverse or take part in the creation or operation of one, partnering with videogame companies and leveraging videogame expertise and fundamentals is the most logical way to ensuring their metaverse is a truly living and breathing world-or worlds-in which people will want to spend their time and money," Mr. Guillemot said.

Interactive game worlds are viewed as key to powering metaverses in the future, Mr. Guillemot said. “As a consequence, there’s huge interest in the space from different players, whether that’s traditional hardware makers, entertainment companies or tech giants. That’s leading to a multiplication of the number of platforms on which videogames can be played."

Many of the technologies that are set to power the metaverse, from artificial intelligence to blockchain, cloud computing, and virtual reality, “are currently being experimented with and mastered by videogame companies like Ubisoft," Mr. Guillemot said.

This story has been published from a wire agency feed without modifications to the text