20-minute duration.
I'm short on time but wanted to talk about the Ubisoft situation so you get me doing it while I do the dishes.
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Contact: ljbaby654@gmail.com
consoles: sirljownsu
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Transcript (unedited)
00:00
Hello! I wanted to talk a little bit about, uh, tencent and Ubisoft. Uh, in their situation of what's going on, because I feel like, obviously, Ubisoft has been in trouble for the last few years. Uh, some underwhelming releases to titles that had no business. Performing poorly, uh, specifically the Star Wars.
00:23
Uh, Outlaws title. And um? Uh, before I get to that, my name is Larry Johnson and. Am the owner of this the website, happytown applesauce. It's named that for no other reason, then that's a name. And I'm 49 years old, and I've worked at companies in retail like art.com and Amazon, and that sort of thing I have 20 years experience in that space.
00:50
Uh, video games have always been important to me, so I like talking about the stuff. Um, I am going to be doing my dishes while I'm talking to you, so it's going to be clanging and some noise. Hopefully, my voice comes in over top of that. I don't have a lot of time.
01:07
Uh, explore this side of my hobby, but I like doing it. So, I have to do it when I'm doing something else. I know there's a lot of people that are 30 years old, and they're not married with. I have one child is eight. Um. So, it's a lot easier when you're 30 and don't have kids.
01:26
And as I did, I have a Blog that goes back almost 20 years now, so I'm an old head with this stuff. But back to Ubisoft. Going 10 cent. Uh, something I don't think people. Are talking about outside and not trying to be like a new thing, but I think it's important to mention.
01:47
Outside of Ubisoft, performing poorly over the last. Uh, five or six years. Is that tencent? Was that, you know, already invested in Ubisoft? And. Uh, they bought this. They bought it in when the stock was obviously worth a lot more. And the company was. Dying. Effectively, and so they sent a nasty Graham.
02:13
And I think most people remember, but have forgot? Are forgetting to bring it up. Uh, last year that effectively said Ubisoft needs to change. Of, you know what they're putting into their games? Um. You know, the wider audience are broad as possible. Audience thing that you just? Said they were doing.
02:34
Tencent was, uh, cut out that shit, and uh, in, in the corporate speed. And. Um, so it was. It was a warning shot, and I'm sure that they, they all, you know, you'll always have offers on the table to do. You know, mergers and takeovers and? And setting up new subsidiaries and all that other stuff I don't.
02:56
I don't want to go too far into that because I'm not. Uh, I mean, I. I've worked in retail a long time, but I've I'm no expert on that side of the business, especially macro. Economics like Ubisoft and tencent. But I did want to mention that because? 10. Was getting really frustrated that their their investment was was dying.
03:23
And so they sent that letter letter. I think it was last summer or so. And. The reason I wanted to talk about it is because I think Ubisoft. I it's around the time Ubisoft. Uh, delayed Assassin's Creed Creed Shadows. And. I don't. I see people downplaying the impact of Assassin's Creed Shadows.
03:52
Uh, in regard to? What happened to Ubisoft and obviously everything leading up to that? On the years prior, especially. A Disney property, like Star Wars and IP. That they fumble. I think tencent. Sent that message, and Ubisoft was, like, oh crap, we have to do something about this. To appease them.
04:16
Uh, otherwise they're going to try some Shenanigans with our company. And. Uh, so I wonder. And this is all this is speculation. They thought they could do. To appease tensor. Last summer, in all fall, when they first delayed it the game until February 14th and then. Uh, subsequently, another month into March end of March.
04:48
I think tencent said. Let's look at this and get all the you know. Sort of the. The cultural. Uh, weirdness out of the game. In other words, I, you know, it makes you wonder how much was in it in the first place? Uh, it's possible that they cut even more that was in there.
05:13
Uh, the and I don't mean this in a demeaning way, but the the queer relationships? Uh, that Ubisoft had in this game, you know, you had a. First of all, you had. Uh, African Samurai in. Uh, Japanese Assassin's Creed game. And I think the expectation they were subverting expectations in the first place with that, but?
05:36
Um, to give his relationships from as far as I can tell. Uh, you know, a handful of relationship one. Was? Uh, you know, non-binary in other was? Was, uh, gay, and then another one was with, like. Uh, descend. Um, one of the mothers of all the Emperors they've had in Japan.
05:59
So it was, it was a real. I, I don't know, it's, I don't know if it's broken brain stuff, or if they actually thought that that would draw players into the game. It. I mean, it's hard to believe, I mean, from? You know, Outsider perspective. It looks like maybe they were sabotaging it, but given everything they had done in some of their games.
06:24
Before that, I think it was on purpose that I actually thought, you know, the that it would bring more players, but? Getting back to the to the delay tencent was saying, you know, fix some of this. Now as an investor, you have to listen to that. And I think they're at, like, close to ten percent.
06:45
And as far as ownership in the company, so that's a significant chunk chunk. When you're talking about a crop, a company that's worth billions. They. The first delay, and then the second delay. I just wonder if it wasn't enough. When they first? You know, went back and said, okay, here's what we did.
07:06
Here's how we changed the game, and I think 10 cent was, like, that's not enough. So, they delayed it again. And it's still released in the state that it did and. You know, obviously, the game. Uh, became like a cultural, cultural War kind of. Uh, Flash point like, like so many other games, uh in recent months.
07:30
And they're all failing, and I don't think it's so much due to. Uh, the cultural war and the the people that are sort of leading the charge on it, you know, like, what happened with to Target and John Deere and some other companies, which? Lays some groundwork. But I, I think, when you, when you when you're anti?
07:57
You're swimming Upstream culturally? You have to. It's, it's really difficult. Uh, being, you know, like a salmon going opposite, it's going with with the cultural flow. And I don't know how, who or or why? Now, how it's even possible in companies if Ubisoft size thought that they could do that?
08:20
And have a pop. You know, have a game that sells. You know, uh, 10, 20? You know, million? Plus, I think maybe they saw what they did with Valhalla, and they had queer relationships options in that game. Because I played it as everyone seemingly did. Around the pandemic, and that sort of thing.
08:43
And, and it was weird. Um, it's kind of, like, did they really need to put this in there and it was over the top? It does. It did seem like more relationships as the game went on. Was a dude asking if? If you like this, one of this plow sword or whatever the hell it was.
09:02
So, I was like, it's kind of like, what the, what am I playing what the fuck? So? Um, maybe they wanted to double down on that? Anyway, the game was delayed, and I think the writing was on the wall. They, the French being a French company, and you know, French, Canadian?
09:20
Uh, developers. They probably did not want to. Um, you know? Artistically changed the game in that way. Which is admirable that they would stick by. What they were creating creatively, and you have to do that when you're dealing with a company that you have to do that you have to have a back way.
09:43
You have to stick by what you're doing because a lot of people are working on it. And if you say. Okay, we gotta change this creative decision that you made. It's going to be deflating to the entire. Organization out outside of the the fact that they're French, and they think they're right, and they're doing.
10:00
You know? Absolutely gone the right track, and that sort of thing they have. Self-Awareness when things aren't going well. I say that from experience. All these French businessmen seem to go to the same school. But um? So they delayed it twice. And when the game came out, I think 10 cent was, like, see, it didn't work.
10:22
You, you were swimming Upstream culturally. And the game is going to sell what 10 or 20 percent of what Valhalla sold. And I think Valhalla was. Somewhere close to 20 million was, that is, if that's right. So if they get the two million, you know they're still nowhere near where Valhalla was?
10:44
Then, I thought, I really, truly believe they thought. They had another. Uh, hit on their hands like that. But. Um, you know, with all the other failures they had. It did seem like a home run ball and tencent sick of losing money. I'm sick of, probably didn't want to send.
11:08
A letter like they sent. Last year, I'm gonna get their shit in gear. Um. It's, like, okay, we're just gonna take these from you because we can make money off them, and you're just. You know, you guys have lost as they said anything. I lost the plot. So, where that leaves Ubisoft now is, this is, is, they put all their debt and and we'll call it Ubisoft one, which is the old, original Ubisoft and Ubisoft 2, which is?
11:37
You know, they're free to get better loans and. Uh, because their books look better now. So, Ubisoft 1 is going to sort of. Is gonna the tree of? You know, being Ubisoft and the fruit that it was making, is, you know, withering, on the vine? That's where all the debt and everything is, and I think they're just.
11:57
Um, it wouldn't surprise me if they try to shut it down, but you know, being all over the world in different labor laws, and that sort of thing they probably can't do what they want to do. But they could get rid of a lot of debt if they did that.
12:10
Um. So yourself, one is kind of, kind of like. Limp along for a while. Um, and they probably do Cuts sooner than most people think. Uh, and they'll be deep. Um. There's something, I, you know, since I'm doing this sort of Freewheeling this while I'm doing the dishes? Um, but you can look it up.
12:32
It's it's, it's it's. It's a documentary done in an Obama. Obama was one of the people that financed this. Because he was doing was doing. He might still be doing stuff on Netflix. Uh, but it's it's about a Chinese company that that took over a warehouse. In the Midwest, and that hit close to home to me.
12:50
I forget the company's name. What is manufacturing? And that's, that's my entire background. And, uh. It, it just does a bunch of cameras, you know, following the activity of what's going on and? Showing that the culture cultural difference between the Chinese run company, you know they're coming in, buying the American company and how they're talking about Americans?
13:19
You know? It's very UNPC. Americans are fat lazy. They don't know what they're doing, and that sort of thing that's what was being discussed in the Chinese meetings. And so. You know, they the Chinese do not? Share. The cultural values that the West does, and you know, it's certainly not the United States.
13:41
Documentary, but also, you know, what the, you know, France, and Europe, and that sort of thing? So, there's going to be a culture shock. I think now that tencent has a little more power with 20% ownership over the Ubisoft II. Where all the good IPS are, like Assassin's Creed and Far Cry.
14:01
Um and. The live service, Rainbow Six stuff. Um. I forgot my trainer thoughts? Um, oh, with 25. Uh, power that company that makes them. I think people think, well, Ubisoft has the other 75, but that's not the way it works when you have 25 own 25 of the company.
14:29
You have a really big stick. There's a bunch of other investors that are smaller, and that sort of thing. So, while they don't have 50 percent. Uh, 25 likely makes them the largest voice in the room besides. The French family that owns it, and even they, it sounds like, is more, are more in an executive role, and not in.
14:50
Sort of voter position, so 25, they probably have the biggest stick. In the company, I imagine they might even sell different. Um, sell-off. Some of theirs, or maybe buy some more and then sell it. And that sort of thing, I mean, there's lots of ways for them to make money.
15:07
Now, I mean, they just. Basically hit the lottery. Especially since they could dump off some of the debt and the bad IPS. Um. But that's it. I think that they're going to go in aggressive, and I don't I, I do in some regard. Feel bad for the for the?
15:29
Uh, the employees. You know, just as everybody should feel that whenever people get laid off, but they've they've sort of made their own. They haven't sorted. They have made their own bed. Um, in this situation. And you can't? You can't. When you're not serving your customer demo? Um, you're gonna lose money.
15:54
And if you're trying to send a message, or you're trying to create? A brand new audience you have to. You have to do that with different products. You can't take a product that has existed for almost 20 years in IP, like Assassin's Creed, and use that to sort of um.
16:12
Try to steer your audience. Um, and and it's not steer your audience, but. Uh, bring in a new audience and shed the old audience. Maybe you don't like them, or what do the kids call the chuds or whatever, and you want this brand new sort of? X social media?
16:33
Uh, alphabet group to be audience. I think you have to do that with. Original eyepiece. And you can't just? Uh, try to tell. Um, white male. Audience that has been enjoying the games for a long time. To say that, you know, just, you're gonna have to eat Crow while we bring in this other group.
16:59
Um, it doesn't make sense. So, there's an infection at the company in regards to that, but either way. It's still hard to not feel bad for what's about to happen, and I don't. I mean, going back to that documentary. On Netflix. You know, it's, it's gonna it'll be Swift and brutal.
17:20
And employees will not be happy, and I'm sure there'll be lots of challenges and lots of Court problems, and I'm sure this, I'm sure. Uh, Canada will step in and actually. Uh, have a say in what's going on? I know they just revised some of their. Incentives and stuff that they were giving to the video game industry just this week.
17:38
Um, tax credits, and that sort of thing. You know, Ubisoft? Was relying on and Canada, and why those two Studios? You know, still existed. Um, they were getting, you know? 600 plus million dollars over a few years to it, you know, survive. And so, when you're getting that much money.
18:01
You don't have to worry about sales, become less of a priority, and then you start. Uh, try to put other things forward because you have all that money. I mean governments can't write bad checks. Um, at least, not the United States, and I'm sure Canada is in a similar situation.
18:19
You know if you look at their balance sheet, I think it was something like. Um, ubisoft's Revenue. Was 600 million dollars, and you know, their tax incentives from the Canadian government was like 90 of that, so? Anyway, I'm sure that's part of the problem. And I'm sure shutting down usaid.
18:40
Has an impact on Ubisoft somewhere along there. Creative and production line. But anyway, that's all I have to say. Hope you enjoyed it. That's a little bit easier than writing stuff. It might be kind of chaotic, but? You know, I appreciate you listening. And, uh, you know, if you have any questions or anything, reach out.
18:58