Clash of the Titans: The Gameloft – Vivendi Controversy

Recently, we have been hearing about a controversy between two giant companies, Gameloft & Vivendi. To many of us, Gameloft is viewed as the pioneer of mobile gaming, releasing one of the best titles of all time. Some of the well known games they have released are Modern Combat, N.O.V.A., and Asphalt. Gameloft is a French mobile gaming company that was founded by the Guillemot Brothers, the founders of Ubisoft. On the other hand, Vivendi is a French multinational mass media company which operates in the industry of talent discovery, production, and distribution of content. The company is headed by Chairman Vicent Bollore, a billionaire with a past of being an activist investor. What you would recognize about Vivendi is their large Canal+ Group and Universal Music Group.

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It certainly sounds like a civil war, considering both are French. But what is the controversy all about that we have been hearing of lately? Vivendi is a massive company that has been involved in acquisitions and mergers for a very long time. Just to mention a few, in 2007, it announced that its Vivendi Games will be merging with Activision, holding 52% stake in the new business deal. But in October of 2013, it sold most of its Activision stake, keeping 12% only. In 2015, Vivendi bought 80% share in Dailymotion. But here comes the important part of this article. In October 2015, Vivendi bought stakes in Gameloft and Ubisoft (both founded by the Guillemot Brothers) and the percentage of stakes they acquired were 6.2% and 6.6%, respectively. This move marked Vivendi’s interest in the gaming business again. Only a week later and Vivendi announced that it owned 10% of each company.

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Merely a few weeks after that, Vivendi owned 17.34% of Gameloft and 10.81% of Ubisoft. The Guillemot Brothers feared a takeover by Vivendi, considering that within a short time, it has acquired a considerable amount of shares. It is clear that with Vivendi’s actions, its trying to gain board control. The two Titans have been fighting via public statements, with Vivendi claiming that it doesn’t exclude a majority acquisition of both companies, while the Guillemot Brothers announcing that they are not interested to work with Vivendi, and made a public statement on October 15th, 2015: ”We take note of the unsolicited action on the part of Vivendi. We reiterate our intention to remain independent, an approach that, since our founding 16 years ago, enabled us to become a world leader in mobile gaming, and from 2015, a significant and fast growing actor of mobile advertising.”

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As of December 7th of 2015, Vivendi owns 26.7% of Gameloft and that is worrying the founders that have no interest, whatsoever, in being taken over. Vivendi had said that if collaboration between the two companies should fail, it doesn’t rule out taking over Gameloft. While there has been news that Vivendi wants a seat on board, Gameloft has been silent about the issue lately with no response to its rival. The Guillemot Brothers have increased voting stake to 25% as of December 1st to avoid what they refer to as a ”creeping takeover.”

So while this is the basis of the controversy, it all comes down to a bitter question,”In the event of a Vivendi takeover, what will this mean to the mobile games that we expect to see in the future?” Quite hard to imagine such a situation, but if Vivendi has the majority of shares at Gameloft, they may take the company through a whole different path, whether to the better or the worse, we don’t know. But we know that things may not remain the same.

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