Sunday, 16 August 2020

Ubisoft Teams With D-Box To Create Leading Edge VR Experience

D-BOX Technologies Inc. (DBOXF) (DBO.TO)
Current Price (Canada): $0.07
Target Price: $0.50
Upside Potential: 614%
Market Cap: $12 million
Shares Outstanding: 176 million

D-BOX Technologies Inc. (DBOXF) (DBO.TO) rose 75% on over 25 million volume to lead the way in trading on the TSX in Canada on Friday. This happened after it and Ubisoft Entertainment SA (UBSFY) announced a partnership agreement that leverages the use of D-BOX's motion technology to enable Ubisoft to create enhanced experiences for players. The companies have previously worked together but this is an extension to that. Ubisoft is a $10 billion market cap company. The fact that it needs D-BOX's technology to enhance the quality of its games makes the much smaller DBO a prime buyout candidate. Ubisoft could easily swallow up DBO for $100 million Canadian which would lead to a stock price in excess of $0.50. We expect the stock price to continue to move up on hype. The Canadian market has been extremely open to virtual reality plays with NexTech AR Solutions Corp. (NEXCF) (NTAR.CN) and ARHT Media Inc. (ARHTF) (ART.V) being two of the best performing stocks over the last several months. We are up to 913 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel as well as follow our Small Caps, Big Gains blog for more of our Canadian picks. You can also follow us on Twitter @StockTradePicks which has over 4,500 followers.

The press release went as follows:

D-BOX Technologies and Ubisoft® Sign New Partnership Agreement

MONTREAL, Aug. 13, 2020 (GLOBE NEWSWIRE) -- D-BOX Technologies Inc. (D-BOX) (TSX: DBO), a world leader in haptic and immersive entertainment experiences, and Ubisoft® (EURONEXT: UBI), a well-known video game publisher, have signed a new partnership agreement that leverages the use of D-BOX's motion technology to enable Ubisoft to create enhanced experiences for players.

Furthermore, this agreement allows Ubisoft to seamlessly integrate D-BOX’s high-definition haptics and motion technology into the game development process, which will allow players to immerse themselves more deeply into different worlds.

“For more than 10 years, D-BOX has been enriching the motion experience in racing and flight simulation games. This new milestone for D-BOX is the perfect fit between our proven expertise in innovative immersive haptic motion systems and Ubisoft’s reputation for developing leading-edge gaming experiences,” states Sébastien Mailhot, President and CEO of D-BOX. “The possibilities for innovation are endless and we are thrilled to collaborate with Ubisoft and contribute to the gaming experience of the future, designed for a variety of applications for casual and competitive gamers. The video game industry around the world is constantly growing and we are excited to capitalize on this new strategic partnership.”

“Following the success of previous collaborations with D-BOX on virtual reality experiences such as Virtual Rabbids: The Big Ride and Eagle Flight, we are pleased to continue our relationship with D-BOX through this partnership,” says Chris Early, Senior Vice President, Partnerships and Revenue at Ubisoft. “D-BOX’s innovative approach to motion technology will have a positive impact on the gaming experience for our players.” 

D-BOX's technology in the context of Ubisoft's main business line enables reduced latency in virtual reality products. The current delay in VR responsiveness relative to real life can confuse the brain and cause motion sickness in many users. This agreement enables Ubisoft to get a step ahead of its competitors in this growing space. Ubisoft is the creator of popular games like Watch Dogs and Assassin's Creed. Ubisoft's origins are in France but it has substantial operations in Montreal where D-BOX is headquartered. This means that in any buyout scenario, D-BOX can easily be absorbed into the Montreal headquarters and its technology becomes the property of Ubisoft. Based on the extremely cheap price of $12 million CAD, D-BOX becomes a prime purchase target. That would also enable Ubisoft to expand into other home entertainment business lines while the pandemic and social distancing makes those opportunities more lucrative than ever. Or it could use the strength of its brand name along with the D-BOX technology to license it out to third parties much more efficiently than the little company from Montreal ever could on its own. Management and employees of D-BOX would continue to have good jobs under the Ubisoft umbrella. We believe that a buyout deal could be done in a friendly manner and not in a hostile takeover at the right price.  

Disclosure: We are long DBOXF/DBO.TO

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