Does Ubisoft Own EA? Unpacking the Complex World of Video Game Ownership

The short answer is a resounding no, Ubisoft does not own EA (Electronic Arts). These are two separate, publicly traded companies, each with their own ownership structures and independent operations. While they operate in the same industry and have engaged in business dealings in the past, there is no ownership relationship where Ubisoft controls or owns Electronic Arts.

Understanding the Corporate Structures

To fully grasp why Ubisoft doesn’t own EA, it’s essential to understand the basic corporate structures of both companies and the key players involved.

Electronic Arts (EA)

Electronic Arts Inc. (NASDAQ:EA) is a global leader in digital interactive entertainment. They are known for franchises like EA Sports (including Madden NFL), Battlefield, Apex Legends, and The Sims. EA is a publicly traded company, meaning its shares are available for purchase by the public on the stock market.

Ownership of EA is primarily held by institutional investors. According to the provided text, these investors control around 86.41% of the outstanding shares. This means that mutual funds, pension funds, and other large investment firms have the most significant influence over EA’s direction. While no single entity owns a controlling stake, these institutional shareholders collectively determine the fate of the company.

EA Sports is not a separate company; it is a division or brand owned and operated by Electronic Arts. It is the umbrella under which they operate popular sports game franchises like Madden.

Ubisoft

Ubisoft is a video game company headquartered in Saint-Mandé, France. They are renowned for developing franchises such as Assassin’s Creed, Far Cry, Just Dance, and Tom Clancy’s series. Like EA, Ubisoft is a publicly traded company.

The ownership structure of Ubisoft is more complex. While it is publicly traded, the Guillemot family, the founders of the company, retains a significant level of control. They hold a substantial portion of the company’s shares and, more importantly, a larger percentage of the voting rights. In September 2022, Tencent invested further in Guillemot Brothers Limited, the company that manages the Guillemots’ ownership of Ubisoft.

The Guillemot family and Tencent collectively own roughly 25% of Ubisoft and 29.7% of its voting rights. This dynamic allows the Guillemot family to significantly influence the strategic direction of the company, even without owning a majority of the shares outright.

Past Interactions: EA’s Stake in Ubisoft

Historically, EA held a stake in Ubisoft. In 2004, EA acquired a 19.9% stake in Ubisoft. However, this stake was gradually sold off, and by 2010, EA had sold its remaining 14.8% stake in the company. This means that even though EA once had a significant investment in Ubisoft, that investment has been unwound, and EA no longer has an ownership position.

Market Capitalization and Brand Ranking

While ownership is the crucial factor, it’s also useful to compare the size and brand recognition of the two companies.

Electronic Arts has a higher market capitalization. The article states, “Their current market cap is $41.98B.” While a specific number is not given for Ubisoft, the article also states, “UbiSoft Entertainment net worth as of October 13, 2023 is $3.8B.”

Regarding brand strength, Ubisoft’s brand is ranked #80 in the list of Global Top 100 Brands, as rated by customers of Ubisoft.

Acquisition Rumors and Speculation

Over the years, there have been rumors and speculation about potential acquisitions involving both EA and Ubisoft. In 2022, it was reported that multiple companies were studying Ubisoft, possibly considering a takeover bid. However, no deal has ever materialized. Similarly, there were incorrect reports that Amazon would buy EA Sports. USA Today was forced to issue a retraction regarding the false information.

These rumors highlight the dynamic and competitive nature of the video game industry, where consolidation and acquisitions are always a possibility. However, they do not indicate any current ownership relationship between Ubisoft and EA.

Conclusion

In conclusion, Ubisoft does not own EA. They are separate entities with distinct ownership structures. While EA once held a stake in Ubisoft, that stake was divested many years ago. Rumors of acquisitions and mergers are common in the industry, but none have resulted in an ownership relationship between these two major video game companies. Both companies operate independently, developing and publishing their own games and content. Understanding the ownership structures and historical dealings provides a clear picture of the relationship – or lack thereof – between these two giants of the gaming world. The complex relationships between games, learning, and society are explored further by resources such as the Games Learning Society at https://www.gameslearningsociety.org/.

Frequently Asked Questions (FAQs)

Here are 15 frequently asked questions that delve deeper into the relationship between Ubisoft and EA:

1. What exactly does it mean for institutional investors to own a majority of EA shares? It means that large financial institutions like mutual funds, hedge funds, and pension funds hold most of the outstanding shares. This gives them significant voting power and influence over company decisions, such as electing board members and approving major corporate actions.

2. Why did EA sell its stake in Ubisoft back in 2010? The reasons for EA’s sale are not explicitly stated in the provided text. However, companies often divest from investments for strategic reasons, such as focusing on core businesses, raising capital, or pursuing other investment opportunities.

3. If the Guillemot family doesn’t own a majority of Ubisoft’s shares, how do they maintain control? They retain control through a combination of factors, including holding a significant percentage of shares with enhanced voting rights and having long-standing influence within the company. The investment from Tencent further solidifies their position.

4. What is Tencent’s role in Ubisoft’s ownership structure? Tencent is a Chinese technology conglomerate that has invested in Guillemot Brothers Limited, the holding company for the Guillemot family’s shares in Ubisoft. This investment strengthens the Guillemot family’s control and provides Ubisoft with additional financial resources.

5. Are EA and Ubisoft competitors, or do they collaborate? They are primarily competitors in the video game market, vying for market share and consumer spending. However, they may also collaborate on specific projects or initiatives from time to time.

6. How does the “Console Reimbursement Program” at Ubisoft benefit employees? It allows employees to purchase a gaming console and receive partial reimbursement, encouraging them to engage with and understand the company’s products and the broader gaming ecosystem.

7. What were the “reports of sexual harassment and abuse” that led to an executive shakeup at Ubisoft in 2020? These reports detailed allegations of widespread misconduct, harassment, and abuse within Ubisoft’s workplace culture. The resulting shakeup involved the departure of several key executives and a commitment to improving the company’s workplace environment.

8. Why was Ubisoft stock falling, as mentioned in the text? The stock was falling due to weaker-than-expected sales and a reduced revenue target, which Ubisoft attributed to the deteriorating economy and lower spending on non-essential goods.

9. What is the significance of EA having exclusive licensing rights with the NFL for Madden NFL? It means that no other video game company can create an American football game using official NFL teams and players, giving EA a monopoly in that segment of the market.

10. How did EA’s Origin platform evolve into the EA App? Origin was EA’s digital distribution platform for PC games. Recognizing its limitations, EA decided to replace it with the EA App, a newer platform designed to better support their subscription services and offer an improved user experience.

11. Why was Origin criticized by the PC community? Origin faced criticism for security flaws and concerns about data privacy.

12. What is the difference between EA Play and EA Play Pro? EA Play is a subscription service that provides access to a library of EA games, while EA Play Pro offers access to a more extensive library, including new releases and premium editions.

13. How does the attrition rate at Ubisoft compare to other gaming companies? The provided text indicates that Ubisoft’s attrition rate (12%) is higher than that of EA (9%), Take-Two (8%), and Epic Games (7%), but lower than Activision Blizzard (16%).

14. Does Ubisoft develop all of its games in-house, or do they work with external developers? Ubisoft develops many of its games in-house, but they also collaborate with external developers on various projects.

15. What are some of the major challenges facing Ubisoft in the current video game market? Some of the challenges facing Ubisoft include competition from other major publishers, the evolving preferences of gamers, and the need to adapt to new technologies and platforms.