EA's Ubisoft Threat

It's funny. Earlier this week, French video game maker Ubisoft announced its entry into the sports video game market by announcing the acquisition of Microsoft's (Nasdaq: MSFT  ) former sports video game assets -- simulation-style sports games such as NFL Fever and NBA Inside Drive among them -- and by signing golfer Vijay Singh to market a new golf game bearing his name. What makes this move interesting is that sports video game king Electronic Arts (Nasdaq: ERTS  ) recently acquired a 19.9% stake in Ubisoft to become the company's largest shareholder.

So what does this mean?

Good question. For one thing, it's worth noting that Microsoft scrapped its sports game business because its games didn't stand up to the competition. Instead, Microsoft partnered with EA by finally getting EA to bring its lineup to Xbox Live -- the online video game service -- and by teaming up with EA in a World Cup promotion.

The parameters have also changed. Now that EA has monopolized the NFL, while rival Take-Two Interactive (Nasdaq: TTWO  ) has signed agreements with Major League Baseball that exclude third-party competition, we probably won't see another football or baseball game out of Ubisoft. But that's OK, considering the games it previously produced weren't much good, anyway.

Ubisoft does, however, have a shot with the NBA and the currently out-of-favor NHL -- two areas where Microsoft had at least gotten good reviews. Ubisoft also might be able to capitalize on other sports that are more popular outside the United States, such as soccer and rugby. And with the Singh signing, the company apparently believes it has a chance to win at golf as well.

But unless Ubisoft manages to blow gamers away with its new offerings, I don't think this is going to affect either EA or Take-Two very much. On the other hand, I do think this is a good sign that Ubisoft, which still views EA's acquisition intentions as hostile, is content to exist on its own and will do everything in its power to make it difficult for EA to pursue a full takeover.

Fool contributor Jeff Hwang owns shares of Electronic Arts. The Fool has a disclosure policy.