Are there any licensing or royalty implications that could affect profitability? | UBI (Aug 15, 2025) | Candlesense

Are there any licensing or royalty implications that could affect profitability?

Licensing & Royalty Outlook

The partnership pairs Ubisoft’s classic Might & Magic IP with Immutable’s zk‑EVM blockchain infrastructure, meaning Ubisoft will likely license the IP to Immutable for a play‑to‑earn (P2E) title while retaining a royalty stream on token sales and secondary‑market transactions. Typical gaming‑blockchain deals carry a 5‑12 % royalty on in‑game token revenue plus an upfront licensing fee that is amortized over the life of the title. Because Immutable’s model is “no‑fee” for developers (the protocol takes only a small protocol‑level fee), the bulk of the revenue split will sit with Ubisoft. However, the volatile nature of crypto token prices introduces earnings uncertainty: if the native token underperforms, royalty receipts could be materially lower than projected, while a sharp rally could boost topline “crypto‑related” revenue but also increase regulatory scrutiny and potential tax complications.

Trading Implications

Fundamentally, Ubisoft (UBI) is adding a new high‑margin, blockchain‑enabled revenue stream that should diversify its earnings and improve gross margins in the medium term, assuming token economics are well‑designed. The deal also expands Ubisoft’s reach into the rapidly growing play‑to‑earn market, which analysts are pricing at a ~7 % premium to traditional game launches. On the downside, any regulatory action on crypto royalties or a sustained drop in token valuations could compress the incremental contribution, making the partnership a net‑zero or even negative driver to profitability.

Technically, UBI is trading near its 50‑day EMA (~€55) with a modest upside bias; the 200‑day SMA sits at €58, providing a clear ceiling. A breakout above €58 on strong earnings guidance (including disclosed royalty forecasts) would likely trigger a short‑term rally (target €64‑66), while failure to articulate a credible crypto‑revenue model could see the stock retest the €52 support zone.

Actionable Takeaway: Keep an eye on Ubisoft’s Q3 earnings call and any disclosed token‑revenue guidance. If the company confirms a royalty rate ≥ 8 % and provides a realistic token price projection, consider a small‑to‑moderate long position with a stop just below €52. Conversely, a vague outlook or negative crypto regulatory news warrants a protective hedge or reduction of exposure.