Ubisoft buys Tom Clancy – forever

Posted by Humphrey Cheung

Paris (France) – French video game company Ubisoft has bought all intellectual property rights to the Tom Clancy name.  Clancy was paid an undisclosed lump sum and will also receive annual payments over the next two years.

The property rights will last forever and cover video games and all related products.  Even though Ubisoft won’t disclose the exact payment terms, the company says its net cash position at the end of fiscal year 2007-2008 will be 20 million Euros less than previously expected.  Jeez, that makes it pretty easy to guess the magnitude of the terms.

In 1996, Clancy formed his own game development company Red Storm Entertainment, which was later bought by Ubisoft.  His name has been behind hit games like Splinter Cell, Ghost Recon and of course Rainbow Six.  Before venturing into computer games, Clancy was known for his detailed novels about warfare, espionage and cyber-terrorism. 

Financially the deal makes great sense for Ubisoft.  According to its press release, the company expects to save big by not having to pay future royalties.  “The royalty savings generated by this acquisition are estimated to have an average positive impact on Ubisoft's operating income of a minimum of 5 million Euros per year,” said Ubisoft.  Of course, the very favorable Euro to Dollar exchange rate probably doesn’t hurt either.  We hope Clancy asked to be paid in Euros.