Last Friday, French gaming company Ubisoft announced the establishment of a subsidiary focused on developing core gaming titles in partnership with Chinese game publisher Tencent. The deal, valued at around 1.16 billion euros ($1.25 billion), will see Tencent take a 25% stake in the new subsidiary, which is estimated to be worth 4 billion euros ($4.3 billion).
Why it matters: In recent years, Ubisoft has seen the poor performance of several games, a fall in stock prices, and shareholder concerns over management. The deal is considered a key move in its financial restructuring and strategic transformation.
Details: According to Ubisoft’s announcement, the transaction between the two gaming giants is expected to be completed by the end of 2025.
- The new subsidiary will manage Ubisoft’s three major core games: Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six, including past titles, ongoing projects, and future releases. Six studios in Montreal and other locations will also join the subsidiary. Ubisoft will grant exclusive, permanent global IP rights to the subsidiary and receive royalties.
- After spinning off its three major IPs, Ubisoft will focus on the continued development of games such as Ghost Recon and The Division, while also exploring new IPs and disruptive technologies, including game engines and online services.
- “With the creation of a dedicated subsidiary that will spearhead development for three of our largest franchises and the onboarding of Tencent as a minority investor, we are crystallizing the value of our assets, strengthening our balance sheet, and creating the best conditions for these franchises’ long-term growth,” said Yves Guillemot, Co-Founder and Chief Executive Officer of Ubisoft.
Context: French gaming giant Ubisoft is in the midst of a severe financial crisis. Since early 2024, its stock price has fallen more than 45%, as Chinese media outlet IThome reported in January. This has raised widespread concerns about the company’s future, with some analysts predicting bankruptcy or acquisition.
- Star Wars Outlaws, the company’s new adventure game released last July, failed to meet sales targets, prompting Ubisoft to lower its revenue forecast for the 2025 fiscal year from 2.3 billion euros to 1.95 billion euros, the same IThome report mentioned.
- The highly anticipated Assassin’s Creed Shadows has been delayed until February 2025, which further contributed to a drop in its stock price.
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