The French Touch?

The "French Touch?"

Although they had already grown substantially since their inception, the scale of activities of the top four French companies—Infogrames, Ubi Soft, Titus, and Cryo— took off once they went public. With their shares highly valued, these companies were able to grow through acquisitions. Such was especially the case of Infogrames, which acquired Ocean (UK) in 1996, Gremlin (UK), GT Interactive (US) and Accolade (US) in 1999, and Hasbro Interactive in 2000, along with many development studios (e.g., Paradigm, Beam, DID) and videogame distribution arms (e.g., Philips Media). The very high valuation of Infogrames' stock provided the company with an acquisition currency, using either shares directly to make the acquisitions, or cash that was raised on the stock market or through the issue of convertible bonds. From €54 million in sales and 194 employees in 1995, Infogrames grew more than tenfold to €674 million in sales and 2150 employees in 2000. Many financial analysts gave high marks to Infogrames' management for its expertise in negotiating, integrating, and restructuring acquisitions.

While Titus Interactive has not grown as much as Infogrames, it concluded a number of acquisitions in 1999 and 2000, including two large videogame companies, Virgin Interactive (Britain) and Interplay (USA), paying for both companies in shares, and a number of small developers abroad, including Digital Integration (Britain), Blue Sky (USA), and Black Cat (Britain). Largely through these acquisitions, Titus grew from 124 employees in 1999 to 691 in 2000.

Ubi Soft followed a different strategy, mainly relying on organic growth rather than acquisitions. The company devoted large portions of its resources to expand its development capacity through hiring, with its development staff increasing from 23 employees in 1994 to 268 in 1996 and about 1100 in 1999. Since 1999, however, its growth has been augmented by the acquisition of several development studios, including Sinister Games (USA), Red Storm (USA), and TLC (USA). In 2000, Ubi Soft's development staff reached 1300 people. Ubi Soft raised considerable amounts of funds from the stock market to finance its internal growth and has also used its stock as an acquisition currency to cover most of the value of its acquisitions.

Cryo also acquired a few small developers, publishers, and distributors—for example, Dreamcatcher (Canada) and Dark Horse Interactive (USA)—and used funds raised on the stock market to finance these acquisitions and its online spinoff, CryoNetworks.