However, it's since been suggested on these pages that Gameloft's failure to hit upon a true free-to-play success makes it a risky move by Vivendi.
So we put it to our Mobile Mavens:
- Do you think Vivendi's takeover of Gameloft will be a good thing?
As the list's resident French, I feel obliged to jump in first.
I think there's a huge risk Vivendi's takeover will fail, but if it does succeed, the uptake can be enormous.
- How could it be a good thing?
Gameloft is a formidable company that has huge production capacity, great art talent, a strong data management pipeline for analytics, user acquisition and in-game advertising, and huge clout with IP owners.
Yet, Gameloft have been struggling to make a significant mark on the top grossing charts, and there are a few reasons for that.
First, their strategy has always been to focus on slow, steady growth with limited risk. But also there are aspects to its inner workings that, in my opinion, prevent Gameloft from shipping as many hits as their production capacity would suggest.
Distributed development doesn't lend itself very well to games as a service, so having marketing in one place, creative in another, and the development team elsewhere reduces the chance of producing a hit game.
I've heard mixed feedback on the working atmosphere at Gameloft and how teams are treated.Nicolas Godement
I've also heard mixed feedback on the working atmosphere at Gameloft and how teams are treated around the world.
To me, if Gameloft were to reach the heights of the likes of King, Machine Zone, Supercell or NetEase, it's clear that it couldn't happen without a strong turnaround of the company's organisation and corporate culture.
Vincent Bolloré, Vivendi's chairman, is a strong character, and the type of person who might just force this to happen.
- Why could it fail?
First, there is massive resistance to Vivendi's takeover at Gameloft and within the industry.
This is further emphasised by Vincent Bolloré's terrible reputation aquired through unpopular management of French TV channel Canal+.
It is also my understanding that Vivendi's main reason for taking over Gameloft is their advertising capabilities, in Vivendi's quest to build the largest integrated media group in France and Southern Europe.
If that is the case, Vivendi won't try to shoot for the top grossing charts, and Gameloft's revenue is likely to decline, although the synergies with Vivendi could end up having a net positive effect over the group as a whole.
The general sentiment in France's gaming industry is opposed to Vivendi's hostile takeover. I think it's important to stay more nuanced, but it's true that the risk is enormous.
John is co-founder of PR and marketing company Big Ideas Machine. Also an all-round nice guy...
Before responding to the question I thought I'd read up a bit more on Vivendi - and I learnt just what a huge, differentiated and global business it is.
To me, there are potential benefits to the deal, as well as several unknowns that could be major barriers for success - a few of which Nicolas already aired.
But the obvious question to start with is: why Gameloft?
It's current market cap is $720m - maybe half what Supercell is worth. For that you get plenty of okay to good games, but no stellar performers.
As Jon said so well in his column, Gameloft saw F2P quite late, and alongside Glu and some of the other leading companies from the Java days, had expanded the business aggressively in Eastern Europe and China, building low cost, large teams which could cope with the volumes of porting required for Java handsets.
Gameloft saw free-to-play quite late.John Ozimek
A lot of the development talent moved to Canada due to the tax breaks offered by the Canadian government in the mid-2000's.
Gameloft has always had the approach of producing excellent copies of proven games and genres, as well as benefitting from console and movie IP - I have always assumed the link with Ubisoft was behind this.
You could argue that, based on the value of the game IP, Glu is a more obvious target as it's cheaper (current market cap is $318m) and although lacks the overall game portfolio, is more suited to a F2P marketplace.
Glu has been seen as an acquisition target for several years, and with the share price having fallen back to $2.40, could be a good bet for a cash-rich business that could bring some serious licenses and marketing muscle to back up a decent games studio.
My feeling is that one of the reasons is that as both are French companies, there is a cultural synergy that could make the integration of the business less fraught than with a US-based business.
Also, through its movie and music divisions, Vivendi will have access to the kind of IP that Gameloft's production skills could go a fantastic job with.
The smart deal here is the advertising business, which has been a bright spark within the Gameloft strategy.John Ozimek
But I really think the smart deal here is the advertising business, which has been a bright spark within the Gameloft strategy. Revenue for the ad side was just announced at €1.2m in April - and growing.
Perhaps with so many entertainment properties already, Vivendi sees the combination of a mobile gaming business and a mobile advertising business as two missing components of its new focus on being an entertainment business, having spent the past 2 years divesting large areas of business such as telecoms and environmental services to focus on the entertainment and media properties.
In fact, this is clearly listed in this document posted online, where Vivendi sets out to the Gameloft staff the reasons for the acquisition:
- "The strength of its franchises and recognised quality of its video games have provided Gameloft the opportunity to build a large gaming community (147 million active monthly gamers and 19 million active daily gamers during the 4th quarter of 2015).
- Vivendi believes that the principal advantages of Gameloft are: the creative know-how of its employees; its development studios; a strong presence on the distribution hub; a comprehensive distribution network; an advertising department offering the most innovative formats and a large international presence."
Then there are the unknowns. Having sold Blizzard to Activision, there is no current games business within Vivendi for Gameloft to compliment.
Michel Guillemot has intimated he will quit as CEO, meaning that Vivendi will have paid a lot for a business that will be CEO-less, and more than likely with a restless and scared workforce.
I'm sure that there is senior talent within the business that is ready to step up - even temporarily; but Gameloft has for so long been effectively a closed organisation, that integrating the business could be tough.
I'm sure we've all heard plenty of stories about how it's not the easiest place to work, and despite being a listed company it has always felt like a family-run business.
Then there is the very public intention to now go after Ubisoft. If Vivendi is once again successful, you have to assume then that not only do you have the challenge of integrating Gameloft into Vivendi, but it makes sense to merge Ubisoft and Gameloft into a single business.
Yes, there has always been commonality between the two, but I can't see this kind of reorganisation without considerable cuts to headcount and offices.
Do I think it's a good thing? On a strategic level it could be, but it's risky. If I was an employee I would probably be feeling very uncertain about how this will pan out.
In terms of the impact on the industry, it's M&A activity which is recognising the value in mobile games, which is a positive.
But I have to say that it's very hard to see what kind of company Gameloft will become as a result of this takeover.
Just my 2 Euro cents to this:
Time changed - Gameloft is no longer the 800lb gorilla in mobile games market as they were in the golden age of our industry.
We were an investor in Gameloft, and we have also now sold our shares to Vivendi.Christopher Kassulke
We were an investor in Gameloft, as some people know, and we have also now sold our shares to Vivendi.
I think the offer from Vivendi is a fair one. Where would Gameloft stands in 2-5 years from now without someone like Vivendi? Vivendi will give them the chance to change and finally move on.
Gameloft was a powerhouse with so many developers and studios around the globe. That’s not needed anymore in the new age of mobile games.
They already started closing them down, as PG.biz has reported over the last two years or so.
It is a shame as Gameloft are frenemies to us for 16 years already. I still remember when they were called Ludiwap, then Ludigames, and then merged with Gameloft.
I deeply respect them and what they have done for the industry. The brothers will sacrifice Gameloft for the sake of Ubisoft in my opinion. Whether they can hold off Vivendi from also taking Ubisoft, we will see.
The good thing is no one can do a hostile takeover with HandyGames.
I wish Vivendi good luck if they join in the very competitive market.
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
I think that Chris is right - we are in a very different era now.
That being said, despite some smart moves by the team at Gameloft, I have felt for a while that there were some issues.
When Ubisoft decided to produce mobile content themselves rather than using their sister companies Gameloft or AMA it felt like the beginning of an end of something.
But despite that, Gameloft continued with their own content to find a good level of success, as well as a few hits with third parties such as Minion Rush.
A hostile takeover always seems a very risky proposition to me - even voluntary mergers fail too often. It's a little bit less risky if there is some IP or property of the company which can be rescued if the worst happened.
Perhaps with Vivendi behind them, Gameloft can deliver something really interesting.Oscar Clark
However, I am at a loss to see quite that that central asset might be.
Perhaps Vivendi has a plan. Perhaps they need the infrastructure of a company like Gameloft able to deliver mobile content globally.
Perhaps they do plan to treat the team well and by offering what appears to be a reasonable price (at least acceptable to investors like Chris), and perhaps that's a sign that they are in this for the long term.
If that's the case, then perhaps delivering on the vast array of brands that will now be available to them to exploit is a formula that can work.
Gameloft started off being a team able to make great adaptations of existing game formulas - making them their own. Perhaps with Vivendi behind them they can deliver something really interesting.
But then I am an optimist at heart.
In response to our token French fry, if Gameloft is to reach the heights of the likes of King, Machine Zone, Supercell or NetEase, they will need a retroviral acquisition.
Acquire a free-to-play competent company and install its management over Gameloft's current leadership, interleaving the rest of the organisation.
The problem there is that anybody who is free-to-play competent is already set; who would really make a prime target for retroviral acquisition?