It hasn’t been a great couple of years for Ubisoft, what with things like Skull and Bones launching to rather middling reception or the long-in-development XDefiant kicking off and then promptly shutting down – never mind all the layoffs and delays and game preservation affronts and bungled attempts at NFT integration. And now, the long-summering rumor that Ubisoft is working on some sort of buyout negotiation with Tencent has finally come to fruition, as last night the companies announced they’ve sealed a deal to create a new subsidiary focused on the Assassin’s Creed, Rainbow Six, and Far Cry franchises… and this new subsidiary is launching with a hefty 25% stake for Tencent.
“Today, Ubisoft announced that it is accelerating its transformation by taking an important step in rapidly evolving its operating model with the creation of a dedicated subsidiary based on its Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six brands. Following the formal and competitive selection process initiated by the Group earlier this year, Tencent’s will invest €1.16bn for a minority stake in the new subsidiary. […] The binding agreement with Tencent follows the formal and competitive process in exploring and assessing different strategic options announced earlier this year. […] In parallel to the creation of this new entity, Ubisoft will focus on nurturing the development of iconic franchises including Tom Clancy’s Ghost Recon and The Division, accelerating the growth of top performing titles and leveraging disruptive technologies on selected new IPs, while continuing to deliver state-of-the-art production game engines and online services. More details on the Group’s future operating model will be shared at a later stage.”
While Tencent is heavily invested, the announcement stresses that this subsidiary will be wholly under the control of Ubisoft; according to CEO Yves Guillemot the creation of the subsidiary is focused upon “crystalizing the value of [Ubisoft’s] assets,” which sounds very close to meaning something.
“Tencent would invest in the new subsidiary which is headquartered in France and 100% owned by Ubisoft immediately prior to the transaction,” the companies say. “Specifically, at closing of the transaction, Tencent would invest a total amount of EUR1.16bn for an approximate 25% economic interest in the New subsidiary, that will be used to strengthen Ubisoft’s balance sheet by significantly reducing its consolidated net debt position, accelerate the Group’s transformation, and sustain growth of selected franchises. After closing of the transaction, the new subsidiary would remain exclusively controlled and consolidated by Ubisoft.”
No specific projects have been announced at this time, nor has their been any statement about how the new subsidiary will benefit from having a 25% investment from Tencent compared to the 10% stake Tencent already has in Ubisoft proper. Regardless, it’s clear that the investment partnership between the companies is continuing apace.
