Ubisoft gets cold feet and looks to Codemasters - EA jumps at Eidos?

Ubisoft shareholders unhappy with Eidos' giant price tag.

Posted by Staff
The Eidos takeover bid is continuing to twist and turn today as financial analysts have called into question the commercial viability of Ubisoft’s bid. It is thought that the projected value of Eidos has been artificially escalated as a result of so many interested parties engaging in negotiations. Ubisoft’s offer of $215 million apparently attaches an excessive 40% premium to Eidos’ real value, and this could easily threaten shareholders’ confidence in the plan.

Eidos’ value had been falling steadily throughout this year. In May, when the rumours first started circulating, Eidos was optimistically valued at around $325 million, with shares floating around the 185p mark. By August, shares had fallen to 150p each, and Ubisoft’s $215 million bid now outweighs the value of the company. It is no wonder that Ubisoft’s share value has taken a plunge today, as many investors interpret this news as an excessive payout for a risky acquisition.

This will be good news for the other publishers circling around Eidos’ negotiation table. If weighty offers from the likes of Sony, Microsoft and EA had forced up the bidding, those same companies will be pleased to have pushed competitor Ubisoft into this somewhat delicate predicament. Similarly, the reaction from shareholders may discourage Ubisoft from pressing ahead, in which case alternative negotiations can be resumed.

If Ubisoft does buy Eidos, it will have to work quickly to realise the value of its assets. Should a combined Ubisoft-Eidos organisation flail for too long in this competitive industry, Ubisoft could find itself stalked by the same giant publishers that it had been bidding alongside in the first place.

However, this does look increasingly unlikely. MCV has reported that Ubisoft is looking closely at buying Codemasters instead, which by most measures, would be a much more conservative and pragmatic acquistion. It has also been suggested that EA has come up with an offer of $300 million for Eidos, which would probably see it win the bidding hands-down, with only Microsoft and Sony able to compete at that level.

Once the fog of the bidding-war has settled, SPOnG will do its best to ascertain the victors and the casualties. Expect an update as soon as the spoils have been officially handed out.
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Comments

Joji 9 Aug 2004 15:36
1/12
Looks like EA for Eidos now I think. Ubisoft for Codemasters would be interesting though.
Ditto 9 Aug 2004 17:06
2/12
I have a bit of a soft spot of Ubi, and I'd quite like them to takeover Codemasters/Eidos.

It wouldn't surprise me if EA tried to overtake a substantial number of the smaller publishers to further solidify its position.

I've written what I think of EA before, so I won't repeat it here.
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config 9 Aug 2004 17:24
3/12
Adam M wrote:

>I have a bit of a soft spot of Ubi, and I'd quite
>like them to takeover Codemasters/Eidos.

I'd rather both were left well enough alone.

The two represent the last of the British software empire, particularly the Codies. That company is part of the UK's gaming heritage and we shouldn't let it be swallowed without trace. I'd hate to think it'd go the way of Gremlin - absorbed without a trace.


Ditto 10 Aug 2004 07:23
4/12
>The two represent the last
>of the British software empire, particularly the
>Codies. That company is part of the UK's gaming
>heritage and we shouldn't let it be swallowed
>without trace. I'd hate to think it'd go the way
>of Gremlin - absorbed without a trace.

I agree with you but Eidos isn't going to last much longer, and I'd rather they went to Ubi than EA.

Codemasters aren't in any trouble at the moment anyway are they? I don't know how good their release schedule is, but they may not want to sell.

I'm still in mourning after Britain lost the late and great Acorn. Not strictly videogames, but one of the most important businesses in computing.
DoctorDee 10 Aug 2004 10:57
5/12
Adam M wrote:

>but one
>of the most important businesses in computing.

How so? Aside from a few uber-geeks and people who had the misfortune to use them in British schools, no-one really gave a damn about Acorn.

And to pre-emptively respond to your argument (in which, I'm guessing you'll tell me that lots of people loved them), if anyone did, they wouldn't have been among the very first computer companies to go tits.
Ditto 10 Aug 2004 11:17
6/12
"Acorn were the last British company to design and manufacture their own desktop system"

Without Acorn there would be no Nintendo DS, no PocketPCs. ARM - Acorn RISC Machines - design the most popular portable chips in use at the moment, including Intel's Xscale. You could say that Britain would be less computer literate - "Making the Micro" screened in the early 1980s was many people's first glimpse of how computers would change the world on their desktop.

Many people involved in computing learnt their craft on the Acorn, and it pretty much created the industry in the 1980s.

Yes, it's a long time ago, but Acorn was one of the most important British computer businesses ever.
DoctorDee 10 Aug 2004 12:18
7/12
Adam M wrote:

>"Acorn were the last British company to design
>and manufacture their own desktop system"

Agreed. But with the possible exception of the Archimedes A1000, no UK designed and manufactured system ever bettered the US machines of their time. They were often better value, and that was a major contribution to the growth of the industry in the UK.

>Without Acorn there would be no Nintendo DS, no
>PocketPCs. ARM - Acorn RISC Machines - design the
>most popular portable chips in use at the moment,
>including Intel's Xscale.

Indeed ARM's (Advanced Risc Machines) contribution is significant. But ARM is not *really* Acorn, it WAS a group subsidiary - but by 1999 Acorn only held 24% of ARM stock. Thereafter, the creative accountants (not crooks, no! Not crooks at all - why would we want tax to pay for police, hospitals and the like) at Morgan Stanley came up with a creative scheme to enable Acorn's shareholders to divest themselves of this stock without paying the capital gains tax.

ARM makes important chips, Acorn made increasingly unimportant computers. If ARM didn't have its market share, Motorola, IBM or Intel would have filled the gap.

>Many people involved in computing learnt their
>craft on the Acorn, and it pretty much created
>the industry in the 1980s.

This is an over statement, the Sinclair ZX 81 and Spectrum, and the C64 did as much to create the industry.

>Yes, it's a long time ago, but Acorn was one of
>the most important British computer businesses
>ever.

Ah, yes, yes, I agree. But last time you said.

"one of the most important businesses in computing."

The addition of the word "British" makes your argument much more convincing ;-) But while we rocked hard on the matter of developing games, our major contribution ot computing hardware was to make it affordable.
Ditto 10 Aug 2004 16:30
8/12
OK, In a British context Acorn were very important.

ARM was fully owned by Acorn and was subsequently spun off. It then changed its name, as you stated, to Advanced RISC Machines.

Addition:
I would still argue that in the 1980s Acorn's computers were some of the most important. They were very, very highly used in Biritish schools and businesses until way after the inroduction of PCs in the UK. Acorn had really declined in the mid-90s due to the need for a standard platform - up until then there had been no real international standard (yes, that is a loose statement).

So in the end I don't think that the tide of PCs loaded with Windows was a particularly bad thing; it brought the needed standards, however I do think that Acorn played an important role, as you stated, in British computing.

It's funny the way we now seem to want choice, yet if Windows was discarded we'd just recenteralise around a different operating system and this would come in for the same critisms as Microsoft - but that's another arguement ;).
DoctorDee 11 Aug 2004 09:12
9/12
Adam M wrote:

>It's funny the way we now seem to want choice,
>yet if Windows was discarded we'd just
>recenteralise around a different operating system
>and this would come in for the same critisms as
>Microsoft - but that's another arguement ;).

But an argument that I'd very much like to get into.

I think you are right the need for standardisation would lead *probably* us to congregate around a single OS again. But improvements in interoperability in the last ten years would make this far LESS likely than it was last time around. Remember when Quark Xpress on PC couldn't open Quark Xpress Macintosh files? Those bad old days are gone. Increasing adoption of standards means PCs and Macs can live alongside one another nowadays with the least inconvenience. But Macs are prohibitively expensive, and only those with as much money as taste (and lots of both!) select them.

But Microsoft has had a stultifying effect on progress and innovation. Whenever they see a technology that challenges them, they buy it (and often bury it), or kill it. Nowadays, with their "you must update" licencing model, they even have the freedom to force new technologies on you. This, I predict will lead to a move away from standard based computing, into ghettos that are Microsoft controlled.

If we could recentralise around an independent, non-proprietary operating system (yes, I mean Linux) then the benefits of development could be shared by all, rather than reserved for the profits of the few.

The problem Linux faces is that if you are not at least 37% geek, it sux as a desktop OS. Applications are often hard to find, and unless you are handy with a compiler, and great at resolving dependencies, impossible to install. It is my belief that the universities of the world should give their students a co-operative development project to systematically resolve the issues with Linux as an OS, and fill the gaps in its applications roster. This would free governments, and individuals, from the grip of a proprietary operating system. Commercial usage could be licenced.
Ditto 11 Aug 2004 19:37
10/12
I'm happy to get into this argument too, and I generally agree with what you said.

DoctorDee wrote:

> bad old days are
>gone. Increasing adoption of standards means PCs
>and Macs can live alongside one another nowadays
>with the least inconvenience. But Macs are
>prohibitively expensive, and only those with as
>much money as taste (and lots of both!) select
>them.

Another problem is education; people are educated on PCs and find that the skills they learn on Windows are only partially transferable to Macs. There is a general lack of skilled Mac personnel and an increasing move away from specialised Mac applications. Many businesses even in the core areas of graphics are moving away from Xpress/Macs to PCs/Indesign.

>But Microsoft has had a stultifying
>effect on progress and innovation. Whenever they
>see a technology that challenges them, they buy
>it (and often bury it), or kill it.

Totally agreed. The main problem with Microsoft and the reason I did *not* want to see them in the videogame industry. This a creative and innovative industry, the opposite to Microsoft-controlled ones.

>Nowadays,
>with their "you must update" licencing model,
>they even have the freedom to force new
>technologies on you.

Yeah, also the idea of renting software stucks. Their licencing practices are causing businesses massive headaches and are the reason the UK government is having a drive towards considering open source software (plus it forces Microsoft to lower their prices).

>This, I predict will lead to
>a move away from standard based computing, into
>ghettos that are Microsoft controlled.

I'd also agree with this statement. Again, this is a danger of having Microsoft as a centeral vendor. I'm worried about their idea of Internet "standards" and their drive to make Windows Media the standard music distrabution format (here they have significant competition from Apple and AIFF - iPods, Motorola contracts and the use of AIFF in the new DVD format).

We are already seeing these problems on the Internet through use of technology such as the FrontPage Extensions. I would also like to comment on Microsoft's attitude to Java, which had the potential to create a standard platform-independant world.

I always wonder why many developers prefer ASP and Microsoft database technologies compared to PHP and MySQL (or even Javascript).

>If we
>could recentralise around an independent,
>non-proprietary operating system (yes, I mean
>Linux) then the benefits of development could be
>shared by all, rather than reserved for the
>profits of the few.

In theory, yes this is a good idea. However it is still possible under the GPL for a business to create the standard distrabution and add their own non-standard technology in order to fragment it.

The other point is that you could argue that in the future the operating system will become less relevent as more and more applications have the potential to be Internet based.

Don't get me wrong, I like this idea, but their are problems as below.

>The problem Linux faces
>is that if you are not at least 37% geek, it sux
>as a desktop OS. Applications are often hard to
>find, and unless you are handy with a compiler,
>and great at resolving dependencies, impossible
>to install.

Totally. And lack of compatibility with Windows. Office is standard and many applications are Windows-only. In particular I have a piece of Windows-only DTP software which has prevented my move to Linux.

>It is my belief that the universities
>of the world should give their students a
>co-operative development project to
>systematically resolve the issues with Linux as
>an OS, and fill the gaps in its applications
>roster. This would free governments, and
>individuals, from the grip of a proprietary
>operating system. Commercial usage could be
>licenced.

I don't think that Linux is the future. I believe that Linux will act as a stepping stone for another future operating system that may dent Microsoft's dominance. The philosophy is good, however I cannot see Linux ever being ready for mass-consumption.

At the moment there is no reason for an average PC user to switch to Linux. As mentioned above, Windows is too standard and education is too standard around Windows causing a requirement of Windows in the home.

It is possible for a move (hell, I was one of the last people to be educated on those Acorns we were discussing) however there also need to be other factors in place. Prehaps we might not see a move until a new hardware platform appears.

I love your confidence in the open-source movement, and I really do believe that to some extent open-source software is the future (again, look at the success to PHP/MySQL and Apache) however I don't think that Linux will be suitable for a desktop OS.



A group of open-source people need to sit down and design an operating system from the ground with the needs of a general desktop user in mind, making sure that they make things like, say, connecting to the net as easy as possible. They then need to develop, before release, general office software - browser, office suite etc. This could take years and years, but at the end of it would be an operating system that would appeal to home users - much as Apple has done with MacOS.

That is, to some degree theory. But, with no disrespect, the people developing Linux do not have a clue how to develop for a desktop user. Allowing commerical companies access to Linux has started to cause the very standardisation problems that we want to avoid. Already a home user who wants to move to Linux has to deal with the various distrabutions, many of which have totally different setup tools and interfaces. Linux will never be as standard as Windows.
DoctorDee 12 Aug 2004 21:57
11/12
Adam M wrote:

Let me just say that I think we basically agree. But that I think you have miscontrued me in part, and that we disagree a little.

>Another problem is education; people are educated
>on PCs and find that the skills they learn on
>Windows are only partially transferable to Macs.

That's largely garbage. What they have learned is not skills (which are totally transfereable - just swap the [Command] key fo rthe [Apple} key in most cases) but they have learned parrot fashion, and usually from menus, not from key-shortcuts. As soon as you move one menu item and one key, most people are scard that they will do something that will erase their birth certificate and zero there bank balance.

Real computer skills are completely transportable.

>Yeah, also the idea of renting software stucks.

It's not that so much as the ability for Microsoft to stop supporting ANY OS or technology whenever they like, and the ability to force you to accept upgrades.

>I always wonder why many developers prefer ASP
>and Microsoft database technologies compared to
>PHP and MySQL (or even Javascript).

Because ASP is superior to PHP/MySQL, and easier than Java.

>In theory, yes this is a good idea. However it is
>still possible under the GPL for a business to
>create the standard distrabution and add their
>own non-standard technology in order to fragment
>it.

Of course, I never said otherwise. But it is not possible for a company who branches the code to force everyone else to adopt their branch as "standard". It is also not possible fo them to deprecate the trunk development. That is the core difference.

>The other point is that you could argue that in
>the future the operating system will become less
>relevent as more and more applications have the
>potential to be Internet based.

Many applications ARE internet based right now. This has not lessened the importance of the OS in any way, nor will it in the near future. A computer needs an OS, even if it is a network OS.

>Totally. And lack of compatibility with Windows.
>Office is standard and many applications are
>Windows-only.

Hold on, two different issues there. Firstly, Office interoperability is being achieved by software like Open/StarOffice. Secondly, it doesn't matter if a program is WIndows only as long as there is an equivalent or superior program on MacOS/Linux/whatever.

>In particular I have a piece of
>Windows-only DTP software which has prevented my
>move to Linux.

But probably would not have prevented your move to Mac?

>I don't think that Linux is the future. I believe
>that Linux will act as a stepping stone for
>another future operating system that may dent
>Microsoft's dominance. The philosophy is good,
>however I cannot see Linux ever being ready for
>mass-consumption.

It may be much closer than you think. But I am not saying that it is ready, not that it necessarily will become so. The problem with Linux is there's no single, central organisation pushing it forward.

>At the moment there is no reason for an average
>PC user to switch to Linux.

Which, I think, I said.

>Prehaps we might not see
>a move until a new hardware platform appears.

Don't hold your breath for that!

>I love your confidence in the open-source
>movement.

It is here I think that you misconstrue me. I have no confidence in the Open Source movement. I think its very openness is its weakness. I was suggesting a massive, consolidated, concerted and co-operative development project that would effectively re-write the book on open source development. That's not something you do if you have lots of conifenced in the status quo.

>A group of open-source people need to sit down
>and design an operating system from the ground

There really is no need fo rthat. Linux only needs a few improvements to make it superior to Windows.

>then need to develop, before release, general
>office software - browser, office suite etc.

Linux has perfectly good browsers, and OpenOffice is nearly as good as Microsoft Office.

>That is, to some degree theory. But, with no
>disrespect, the people developing Linux do not
>have a clue how to develop for a desktop user.

That is garbage. I accept that they have not done too great a job of it so far, but the desktop has not previously been their focus. More recently it has and recent distros have been much improved.

>Linux will never be as standard as Windows.

It may never be as constricted and constrictive as Windows, but it complies with more standards, even now.
Ditto 13 Aug 2004 14:19
12/12
But the Linux community will never develop a good desktop OS; they need, as you specificed, a standard single vendor. Users do not want hundreds to choose from. In addition, for most users, there will never be a reason to switch from Windows except cost.

Linux is also far from superior to Windows. Windows 2000/XP are very reliable, and Linux can only hope to match the ease at which users can achieve common tasks. From my experience, Windows has been more reliable than Linux simply because so much of the complex config is done automatically and there is less room for mistakes. To some extent cost will not motivate people to buy an new operating system. Skills, ease of use, support and software will. Until Linux applications can be bought of the shelf and are as good as Windows ones (I'm sorry, but nothing can rival Office - it a really nice set of applications).
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