Between Splinter Cell, Rainbow Six, Ghost Recon and more, there's no question that the Tom Clancy name has been a huge success for French publisher Ubisoft. Company officials pointed out that the brand is "regularly in the top ten best brands of the year" in the game industry and in 2006 it was the No. 2 brand in the U.S. in terms of units sold.
Today, Ubisoft made sure that all rights to the Tom Clancy brand remain theirs. A new agreement with Tom Clancy gives Ubisoft all intellectual property rights to the Tom Clancy name, "on a perpetual basis and free of all related future royalty payments, for use in video games and ancillary products including related books, movies and merchandising products."
The price for the all-cash acquisition was not disclosed, but Ubisoft did say that following the transaction it expects to have a net cash position of around 130 million Euros by the end of fiscal 2007-08, compared to a previous expectation of approximately 150 million Euros. The company said that it will also make additional payments in fiscal 2008-09 and fiscal 2009-10.
Importantly for Ubisoft, the deal is also expected to generate royalty savings, which the company said is estimated to have an average positive impact on Ubisoft's operating income of a minimum of 5 million Euros per year. This is based on the past performance of Tom Clancy branded video games and excludes any potential contribution from sales of ancillary products.
"After ten years of a highly successful collaboration which has seen the creation of blockbusters that set standards in the videogame industry, such as Tom Clancy's Splinter Cell, Tom Clancy's Ghost Recon, and Tom Clancy's Rainbow Six, today, acquiring the perpetual property rights of the Tom Clancy name for video games and related projects is a major event," stated Yves Guillemot, Chief Executive Officer at Ubisoft.
He continued, "The future of our industry lies in our capacity to create and develop brands that captivate consumers and that present a myriad of opportunities for the full spectrum of entertainment, be it video games, books, movies or other media. The Tom Clancy brand is recognized around the world for offering exciting video games, films and books. The most recent example of such value creation through brand management is the EndWar book, based on the video game story, which has been in the NY Times top 10 Paperback Mass Market Fiction bestseller list for the last four weeks. Capitalizing on the strong franchises that we've built over the past 10 years, we will take the Tom Clancy game brand to the next level of the global entertainment industry."
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