Ubisoft Shareholders in Talks over Possible Buyout Terms, Sources Say

Ubisoft Entertainment logo is seen at the Paris Games Week (PGW), a trade fair for video games in Paris, France, October 27, 2024. (Reuters)
Ubisoft Entertainment logo is seen at the Paris Games Week (PGW), a trade fair for video games in Paris, France, October 27, 2024. (Reuters)
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Ubisoft Shareholders in Talks over Possible Buyout Terms, Sources Say

Ubisoft Entertainment logo is seen at the Paris Games Week (PGW), a trade fair for video games in Paris, France, October 27, 2024. (Reuters)
Ubisoft Entertainment logo is seen at the Paris Games Week (PGW), a trade fair for video games in Paris, France, October 27, 2024. (Reuters)

Shareholders of Ubisoft Entertainment SA are considering how to structure a possible buyout of the Assassin's Creed video game maker without reducing the founding family's control, two people familiar with the matter told Reuters.

The Guillemot family, which is the largest and founding shareholder, has been in talks with Tencent and other investors in recent weeks about funding a management-led buyout of France's largest video games maker, the people said, speaking on condition of anonymity.

However, the Guillemot family has indicated it would like to retain the control it has over the company, which also makes Just Dance, Far Cry and Tom Clancy's video game series, as part of a deal, the people said.

Tencent, currently the second-largest shareholder in Ubisoft and China's biggest social network and gaming firm, has yet to decide whether to participate in the buyout and increase its stake in the company, one of the people said.

This is partly because it has asked for a greater say on future board decisions including cash flow distribution in return for financing the deal, which has not been agreed upon with the Guillemot family, the person added.

Discussions between the two parties are ongoing as Tencent also wants to prevent any potential hostile takeover of Ubisoft by other investors, said the person, adding that Tencent's plan is to remain patient and wait for the founding family to agree to a deal.

Tencent may opt not to increase its stake in Ubisoft, as it considers its current direct holding of almost 10% in Ubisoft sufficient for maintaining its gaming business cooperation with the company, the person added.

Tencent declined to comment. A representative of the Guillemot family did not respond to requests for comment.

"We remain committed to making decisions in the best interests of all of our stakeholders" a spokesman for Ubisoft said. "In this context, as we have already indicated, the Company is also reviewing all its strategic options."

In October, Ubisoft said it regularly reviewed "all its strategic options", but declined further comment on a report of buyout interest.

Shares in Ubisoft rose as much as 16% after the Reuters report. Its shares were trading up 12.1% at 13.2 euros by 1445 GMT.

The buyout talks come as some minority shareholders including AJ Investments have been pushing for either a take-private or a sale of Ubisoft to a strategic investor amid the stock price plunge, Reuters previously reported.

The company's shares fell to their lowest level in the last decade in September after it cut its outlook on weaker-than-expected sales and postponed the launch of "Assassin’s Creed Shadows" title.

This week it announced it would discontinue development of its gaming title XDefiant and as a consequence close its production studios in San Francisco and Osaka, and ramp down production in Sydney.

Ubisoft is run by the Guillemot family, which owns 15% of the firm, followed by Tencent which owns just under 10%, according to LSEG data.

The family held about 20.5% of Ubisoft's net voting rights while Tencent owned 9.2% as of the end of April, as per the firm's latest annual report.



Video Game Actors Are Voting on a New Contract. Here’s What It Means for AI in Gaming

A picketer holds a sign for the SAG-AFTRA video game strike at Warner Bros. Games headquarters on Aug. 1, 2024, in Burbank, Calif. (AP)
A picketer holds a sign for the SAG-AFTRA video game strike at Warner Bros. Games headquarters on Aug. 1, 2024, in Burbank, Calif. (AP)
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Video Game Actors Are Voting on a New Contract. Here’s What It Means for AI in Gaming

A picketer holds a sign for the SAG-AFTRA video game strike at Warner Bros. Games headquarters on Aug. 1, 2024, in Burbank, Calif. (AP)
A picketer holds a sign for the SAG-AFTRA video game strike at Warner Bros. Games headquarters on Aug. 1, 2024, in Burbank, Calif. (AP)

An 11-month strike by video game performers could formally end this week if members ratify a deal that delivers pay raises, control over their likenesses and artificial intelligence protections.

The agreement feels "like diamond amounts of pressure suddenly lifted," said Sarah Elmaleh, a voice actor and chair of the Screen Actors Guild-American Federation of Television and Radio Artists' interactive branch negotiating committee.

Union members have until Wednesday at 5 p.m. Pacific to vote on ratifying the tentative agreement.

Voice and body performers for video games raised concerns that unregulated use of AI could displace them and threaten their artistic autonomy.

"It’s obviously far from resolved," Elmaleh said. "But the idea that that we’re in a zone where we might have concluded this feels like a lightening and a relief."

AI concerns are especially dire in the video game industry, where human performers infuse characters with distinctive movements, shrieks, falls and plot-twisting dialogue.

"I hope and I believe that our members, when they look back on this, will say all of the sacrifices and difficulty we put ourselves through to achieve this agreement will ultimately be worth it because we do have the key elements that we need to feel confident and moving forward in this business," said Duncan Crabtree-Ireland, the SAG-AFTRA national executive director and chief negotiator.

Here’s a look at the contract currently up for vote, and what it means for the future of the video game industry.

How did the current strike play out? Video game performers went on strike last July following nearly two years of failed negotiations with major game studios, as both sides remained split over generative AI regulations.

More than 160 games signed interim agreements accepting AI provisions SAG-AFTRA was seeking, the union said, which allowed some work to continue.

The video game industry is a massive global industry, generating an estimated $187 billion in 2024, according to game market forecaster Newzoo.

"OD," and "Physint" were two games delayed due to the strike during the filming and casting stage, video game developer Hideo Kojima wrote in December. Riot Games, a video game developer, announced that same month that some new skins in "League of Legends" would have to use existing voice-overs, since new content couldn't be recorded by striking actors. Skins are cosmetic items that can change the visual appearance of a player and is sometimes equipped with new voice-overs and unique recorded lines.

The proposed contract "builds on three decades of successful partnership between the interactive entertainment industry and the union" to deliver "historic wage increases" and "industry-leading AI provisions," wrote Audrey Cooling, a spokesperson for the video game producers involved in the deal.

"We look forward to continuing to work with performers to create new and engaging entertainment experiences for billions of players throughout the world," Cooling wrote.

Video game performers had previously gone on strike in October 2016, with a tentative deal reached 11 months later. That strike helped secure a bonus compensation structure for voice actors and performance capture artists. The agreement was ratified with 90% support, with 10% of members voting.

The proposed contract secures an increase in performer compensation of just over 15% upon ratification and an additional 3% increase each year of the three-year contract.

How would AI use change in video games? AI concerns have taken center stage as industries across various sectors attempt to keep up with the fast-evolving technology. It’s a fight that Hollywood writers and actors undertook during the historic film and TV strikes that forced the industry to a stop in 2023.

"In the last few years, it’s become obvious that we are at an inflection point where rules of the road have to be set for AI, and if they aren’t, the consequences are potentially very serious," Crabtree-Ireland said. "I think that really made this negotiation extra important for all of us."

SAG-AFTRA leaders have billed the issues behind the labor dispute — and AI in particular — as an existential crisis for performers. Game voice actors and motion capture artists’ likenesses, they say, could be replicated by AI and used without their consent and without fair compensation.

The proposed contract delineates clear restrictions on when and how video game companies can create digital replicas, which use AI to generate new performances that weren't recorded by an actor.

Employers must obtain written permission from a performer to create a digital replica — consent which must be granted during the performer’s lifetime and is valid after death unless otherwise limited, the contract states. The time spent creating a digital replica will be compensated as the same amount of work time it would have required for a new performance.

The agreement also requires the employer to provide the performer with a usage report that details how the replica was used and calculates the expected compensation.

Elmaleh, who has been voice acting since 2010 and had to turn down projects throughout the strike, said securing these gains required voice actors bring vulnerability and openness to the bargaining table.

"We talked a lot about the personal, the way it affects our displacement as workers and just the sustainability of our careers," Elmaleh said. "Our work involves your inner child. It’s being very vulnerable, it’s being playful."

What’s next for the video game industry? The tentative agreement centers on consent, compensation and transparency, which union leaders say are key elements needed for the industry to keep progressing.

As the contract is considered by union members, Elmaleh and Crabtree-Ireland said further work needs to be done to ensure the provisions are as broad as necessary.

"Even though there’s a deal that’s been made now, and we’ve locked in a lot of really crucial protections and guardrails, the things that we haven’t been able to achieve yet, we’re going to be continuing to fight for them," Crabtree-Ireland said. "Every time these contracts expire is our chance to improve upon them."

Elmaleh said she hopes both the video game companies and performers can soon work collaboratively to develop guidelines on AI as the technology evolves — a process she said should start well the proposed contract would expire in October 2028.

Leading negotiations has felt like a full-time job for Elmaleh, who took on the role in a volunteer capacity. As the efforts die down, she said she anxiously anticipates returning to video game acting in a landscape that is safer for performers.

Voice acting "is core to who I am. It’s why I fought so hard for this. I wouldn’t do this if I didn’t love what I do so much. I think it’s so special and worthy of protection," she said.