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Streaming Will Transform the Video Games Industry, Says Ubisoft CEO

The head of Ubisoft, Yves Guillemot, believes that streaming will revolutionize the video games industry in the same way that Netflix transformed television and cinema. This comes after Ubisoft struck a cloud gaming deal with Microsoft as part of the tech giant's bid to acquire Activision Blizzard.

Guillemot compared the initial skepticism towards Netflix's streaming service to the current outlook on game streaming. He believes that once streaming takes off, it will happen quickly. Ubisoft's stock saw a significant increase after the announcement of the Microsoft deal.

However, cloud gaming has faced challenges in terms of technical and business issues. Google shut down its Stadia cloud gaming service due to a lack of users. Despite this, analysts predict that cloud gaming-enabled services, such as Xbox Game Pass Ultimate and PlayStation Plus Premium, will double their revenue in the next five years.

Ubisoft is optimistic about the future of game streaming and has strong belief that many games will be streamed and produced in the cloud in the next decade. The company's deal with Microsoft will help increase its market penetration in regions where console gaming is not as established.

The deal has already received preliminary approval from the UK's Competition and Markets Authority, bringing Microsoft closer to finalizing its $75 billion takeover of Activision. Guillemot did not disclose the financial details of the streaming deal, but it will involve a one-time payment to Microsoft for cloud gaming rights for Activision's hit games, including Call of Duty.

In addition to streaming rights, Ubisoft sees the release of more powerful mobile technology, such as Apple's iPhone 15, as crucial for expanding its reach in fast-growing regions. The company is also focused on game launches, resource allocation to successful franchises, and a cost-cutting program to improve its financial performance.

There are speculations that Microsoft's acquisition of Activision will trigger further consolidation in the games industry. Ubisoft, one of the largest standalone game publishers, has partnered with Tencent to protect itself from takeover attempts. The Guillemot family, which runs Ubisoft, has increased Tencent's stake in their holding company, giving them a significant share of the capital and voting rights.

While Ubisoft is open to proposals, Guillemot states that their control over the company's capital is important. He also suggests that the board may explore opportunities to further increase Tencent's stake in the future.


Sources:
– “Streaming Will Transform the Video Games Industry, Says Ubisoft CEO” – Financial Times
– “Ubisoft CEO Predicts Streaming Explosion in Next 5-10 Years” – IGN