 Not too long ago Ubisoft was In a battle and use GEMAT was at the forefront of that battle against a hostile takeover of their company Which basically means that an outside company has purchased at least 51 percent of the stock for that company Giving them a controlling stake overall in said company and that's considered a hostile takeover So instead of a peaceful one where you are just offering your company for buyout and selling out You know all of your you know say your staff's stock or whatever Sometimes is done to help with bankruptcy and other things This instead is where a company is forcefully taking over your company by slowly purchasing up a bunch of stock in order to eventually Own a majority share and thus control the company and then that point you can start replacing all of the board members and All of that jazz as the board members are voted on by majority shareholders now The big deal in all of this is coming up because Nintendo was actually asked a question about this in their investors Q&A We don't have a direct translation here. So we're relying on people on Twitter who have translated this So maybe we'll cover this more in depth once the official English translation is available But Shintura Furukawa was asked if Nintendo has any measures against a hostile takeover If there's any countermeasures in place to prevent such a thing from happening and Shintura Furukawa Basically said no at this time Nintendo has zero countermeasures Against hostile takeovers in the added that if it does occur that the board members are currently legally responsible If such a hostile takeover does indeed happen But there's not any actual defenses to prevent a hostile takeover from occurring now This is important because Nintendo has created a system of internal and external collaboration They have management that you know certain directors that are not actually part of the company Again, I don't know if that's meant to prevent hostile takeovers But maybe it's meant to warn of incoming hostile takeovers so maybe the company is not too inclusive of what's happening outside of its internals and This is interesting because Nintendo has never been in threat of a hostile takeover in the past And there's no saying that they're in threat of a hostile takeover in the present It would require a handful of majority shareholders to actually end up selling to one individual person or one individual company And it's unclear at this point if that would actually occur. So while Ubisoft Literally was almost hostile takeover not too long ago They were able to come to an agreement and get the company that was attempting the hostile takeover to back off and start reselling its shares back to Ubisoft and Nintendo is in a situation where they have nothing to prevent this from occurring now You could assume that Nintendo with all the money in their bank as soon as the hostile takeover is even being Attempted a company gets a 30% shareholder 40% shareholder Nintendo panics. It just starts buying back all the rest of the shares So Nintendo themselves own 51% of themselves But again, that's a measure that is not currently in place And it's interesting because I don't know that Nintendo is ever worried about it And who knows that they ever need to worry about it But hostile takeovers are something that do happen They happen all the time in the business world and it could just be a matter of time before it is Attempted with Nintendo the fact that it was attempted with Ubisoft is pretty scary for the video game industry because it means that non video game companies could come in and Just with having enough money take over a company that doesn't willfully want to be taken over and again It took the efforts of some of Ubisoft's majority shareholders and the you know the founder of Ubisoft really that you know use Gimont to battle back against that hostile takeover to prevent it from happening and even then it still almost occurred like Vivendi was literally probably a year away from actually owning the whole of Ubisoft and that is Scary for the future of video games because Vivendi has done some Crap-tastic things with other video game companies. They have bought out making them even worse And if you already think Ubisoft is pretty bad just remember it can always get worse. I mean just look at EA so this is Scary territory here to even bring up this conversation But it's also important for investors to know Investors want to know how likely it is for Nintendo to go through a hostile takeover and while it's not currently happening It does kind of bring the question what would happen in that case And yeah, sure they will hold the board members legally responsible for allowing it to happen and not preventing it But that doesn't mean that anything is going to stop it from occurring. So Again, we don't need to worry about a hostile takeover It's not actually happening this question wasn't put in place because there's an attempt at it or anything It's a question of investors confidence in Nintendo They want to know that when they buy Nintendo stock when they invest in Nintendo they don't need to worry about another company coming in taking them over and tanking the stock or or what have you or Maybe nullifying their stock by expanding how much stock is available and then them owning even more Ownership over the company as can happen when you make more stock available depending on how you divide that stock up both what's publicly available to purchase and What is available internally for staff members new staff members? You know obviously a hostile takeover is crazy because you can replace the entire board put all new people in and give them a Whole bunch of stock bonuses that ensure that you continuously own a majority share of the company and all more and more and more of it So I I'm glad that this isn't happening currently with Nintendo But it is something that Nintendo should probably think about a bit more and I thought you know What happened with Vivendi and Ubisoft might have made everyone think about that more any publicly traded video game entity? Microsoft obviously is too big to really be in threat of a hostile takeover. I'm not even sure There's anyone in the world that can afford to do a hostile takeover of Microsoft, but Sony might have to worry about it Sometimes, you know, you know square, you know square enix square softer. They might have to worry about it Nintendo, I mean all of these video game more video game-centric companies I guess obviously, you know, Sony does more than video games, but these video game-centric companies I figured after Ubisoft they all would try to put in measures to try to prevent This kind of thing and you know I was trying to look at measures to prevent the hostile takeover and most of it involves things like ensuring that a majority That that a collective majority of shares are in the hold or in the holdings of trusted Employees or trusted members or former members. So as an example like the Yamuchi family, you know Their family still has a whole bunch of shares even after his death ensuring that a Wada's family who overtook his shares after his death are Acting in good faith and not going to sell their shares Miyamoto and basically making sure that enough shares are held within families and people that are trusted to not allow a hostile takeover If it was being presented not that they're not allowed to sell their shares But not sell them to people that are attempting a hostile takeover. There's also things in place where the hostile takeover is occurring You know, maybe there's measures that freeze the stocks and stuff like that But a lot of that is a lot harder to pull off legally it is difficult to prevent a hostile takeover is what I'm kind of getting at and While some companies do have measures in place to try to combat a hostile takeover ultimately if someone has enough money it can happen Anyways, it's interesting that this was a question that was brought up after all, you know after all this vivendi in Ubisoft stuff But it is a question that I'm glad was addressed. It is a question that I am glad We no longer really need to worry about for now because Nintendo at least for a cowboy seems to have Addressed the fact that it is something they do think about it is something that they need to do better about and they are glad This question came up because it was a nice reminder that hey, maybe we should have some better measures in place just in case Just in case now It is much harder to take over a Japanese company than a Western company due to various laws, but it's still possible and Nintendo should have every measure they possibly can they make it as difficult as possible to do such a takeover And unfortunately, there's not a lot of legal protections against hostile takeovers because again These are publicly traded companies and publicly traded companies I mean, that's the risk of being a publicly traded company is someone can buy up a majority of your stock and that's that they own your company but I'm not too worried about it Obviously the concern for us consumers is if a hostile takeover occurs who buys the company what direction are they taking in? Are they gonna replace everyone are they gonna just micro transaction and run everything to the ground? Are they gonna take away Nintendo's console business and make them just into a mobile game maker? How much of things that we fear happening that maybe more greedy ownership might take advantage of? Leveraging Nintendo's IPs into a micro transaction loot box filled mess all over various Systems including bringing games the PlayStation 4 and Xbox one which might excite some people But also I could really deteriorate the brand and the quality of those games Basically make them more like Activision or EA or even parts of Ubisoft where it's really strictly about profit more So than the quality of the experience That's what consumers would have to worry about in a hostile takeover because no no company or person is Realistically going to attempt a hostile takeover Nintendo without the idea that they want to maximize as quickly as they can the Profitability of the company so then they can likely turn around and sell all their shares at the highest value of art after they already Basically destroyed the long-term prospects of Nintendo and I say destroyed because a lot of these companies that bank huge on the mobile games market a Lot of companies that bank huge on these micro transactions and loot boxes have proven over time to be a bit of an Unsustainable business and despite Pokemon goes rapid success. That's eventually gonna fall off too So there is this thing where if Nintendo puts all their eggs in that basket That's a basket that is very quick to make a lot of money, but also just as quickly Tank the whole company. We've seen this with who would have thought that King You know a candy crush and all that Would end up being in a position where most of its employees ended up getting laid off because their new ventures weren't as successful Like this is what happens. It's risky. You can make a lot of money really quick But just as quickly you can lose it all so I'm glad that they're at least thinking about Hostile takeovers and how to prevent them and that as a consumer I can feel a little bit more confident that Nintendo is consciously aware that such a thing could occur That way they can try to do something about it before it happens Because last thing I want is Nintendo to I mean forget getting out of the console business and going to their party like that You know that would be a massive change, but I don't want Nintendo to be taken over by people that only Care about maximizing revenue and to be clear Nintendo cares about money They care about making money They are a for-profit business and they have always been a for-profit business and anyone who thinks otherwise is fooling themselves But there's a difference between being a for-profit business and being an only for-profit business and Nintendo Actually tends to care about the quality of their games And I don't know if they care about each consumer on an individual level what they at least care about consumers experience Hence why they have things like in their lab OVR and other games in general that just say hey Why don't you take a break because Nintendo does care a little bit about the well-being of the people playing their games? And that includes the quality of the experiences even if you don't think the quality of their games has always been the best You have to admit it could get much worse Mario Tennis Aces could have a lot more content and it could all be micro transactions It could be like Starlink Battle for Atlas and every racket every costume every character is you know a micro transaction So as much as I love Starlink that is kind of the downfall of Starlink Battle for Atlas is man There will be stuff put a lot of micro transactions in a game But they should have just been worried about establishing a user base for anyways, that's all I really got for you guys today Thank you for tuning in on this Sunday go Bucks Bucks are facing off against the Celtics today by the time you hear this You probably already know the result of that game. Thank you guys for tuning in Be sure to enter our Nintendo Switch Super Smash Bros. Ultimate giveaway through the gleam.com link down in the description I want to thank you all for tuning in. I love your faces and I'll see you in the next video