Why will Ubisoft be the perfect acquisition for Microsoft and Xbox?

Rumors circling Xbox and Ubisoft have been in the out since the former announced the potential acquisition of Activision Blizzard. Since then, there hasn't been much movement until yesterday, when some fresh revelations have come out.

According to the latest news, the higher ops at Ubisoft are preparing for a potential sale. Some interested suitors include private equity firms like KKR. However, there's a strong incentive for which Microsoft should look to acquire Ubisoft, purely based on what the former could gain.

The fresh news of the buyout comes over the relatively poor performance of financials, which has seen a consistent decline in share prices. The share price has significantly dropped, which has reduced the company's market capitalization.

Yves Guillemot is currently the largest shareholder, but it's rumored that he is looking for an exit strategy. While there has been confirmation or denial of a potential offer, Xbox could be a major winner if it pulls off the coup.

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Ubisoft could be a fantastic deal for Xbox both financially and content-wise

The valuation of any potential deal is usually judged from two major angles - finance and content. To start with finances, there's no substantial amount that a firm will need to pay to buy out Ubisoft.

However, any value will be at a significant discount purely due to how much the valuation has come down. According to Bloomberg, the per-share price has declined from $110 in mid-2018 to $45.

The deal between Activision Blizzard and Xbox will go at a discounted rate compared to the per-share price of the former at the time of the agreement. With Ubisoft, Microsoft has the chance to get a real bargain deal as things stand.

Guillemot is reportedly looking at an exit strategy that could also make things easier for any potential buyer while negotiating a deal.

As with any video game deal, the bigger thing in play is the IPs in question. With Activision Blizzard, Xbox will gain a massive set of IPs in the form of Call of Duty, for starters. There's also World of Warcraft and Overwatch, which will add incredible value for the gaming giants in the future.

A similar potential value could be gained if Xbox gets hold of Ubisoft. Few can vie in the same field as Assassin's Creed regarding IPs.

But the list doesn't stop there with Far Cry, Ghost Recon, and more. Not only are these IPs valuable, but they're all diverse and different from each other.

If Microsoft wants to venture into live service, there are For Honor and Rainbow Six Siege. The latter has recently seen a revamp in player count, and there is also talk of the studio venturing into mobile gaming.

A potential acquisition will allow Microsoft and Xbox to cover many areas and hit many targets at once. The deal will not be without vices as several problems have plagued the French company.

The quality of its games has been criticized. Some of its games are reported to be in development hell. The publisher has also faced challenges with a heavy attrition rate which could be due to weakening financials.

However, this has led to a decline in valuation, which could save Microsoft billions in a potential takeover. Yes, work will be done, and repairs to be made.

When it comes to Microsoft, few in the industry can rival its wealth. The Ubisoft deal won't be without its major worries, as is any financial takeover for the matter.

Xbox will potentially make more gains than losses with the French game makers. Along with that, they will add some more valuable franchises to their enviable list of first-party exclusives.