Ubisoft may have found a lifeline following months of rumors hinting at a possible sell-off or buy-out for the troubled game publisher. The company announced Thursday that it has entered into a deal with Tencent, reportedly worth $1.25 billion, to create a new subsidiary that will take control over three of its popular franchises. News of the deal brought a needed surge to Ubisoft’s stocks which climbed 11% by Friday morning. Negotiations between the two game publishers had reportedly begun back in October when it was claimed that Tencent was seeking a majority stake in the company owned by the Guillemot Brothers
“We are excited to extend our longstanding partnership with Ubisoft through this investment, which reflects our continued confidence in Ubisoft’s creative vision and exceptional talent to drive sustained success in the industry. We see the immense potential for these franchises to evolve into long-term evergreen game platforms and create engaging new experiences for gamers.”
Martin Lau, President of Tencent
Ubisoft has experienced many fiscal challenges for some time and recently it seemed the list of those interested in buying out the company seemed to keep growing. From underperforming game sales with Star Wars Outlaws and Avatar: Frontiers of Pandora, to a misfire with its long-delayed online pirate game Skull and Bones and then repeated delays with its recently launched Assassin’s Creed Shadows, and accusations that it was being “horribly mismanaged”, it had started to look as if the AAA publisher was in an unrecoverable downward spiral but things could be looking up for the company. The new partnership arrives on the 39th anniversary of Ubisoft and the value of the IPs listed in the deal is said to be €4 billion ($4.33 billion).
Per Ubisoft (via GlobeNewswire):
“Today Ubisoft is opening a new chapter in its history,” said, Yves Guillemot, Co-Founder and Chief Executive Officer. “As we accelerate the company’s transformation, this is a foundational step in changing Ubisoft’s operating model that will enable us to be both agile and ambitious. We are focused on building strong game ecosystems designed to become evergreen, growing high-performing brands and creating new IPs powered by cutting-edge and emerging technologies.”
“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 crystalizing the value of our assets, strengthening our balance sheet, and creating the best conditions for these franchises’ long-term growth and success. With its dedicated and autonomous leadership team, it will focus on transforming these three brands into unique ecosystems.”
Guillemot concluded, “We are committed to building a sharper, more focused organization-one where talented teams will take our brands to the next level, accelerate the growth of emerging franchises, and lead innovation in next-generation technologies and services, all with the goal of delivering enriching, memorable games that exceed players’ expectations, and create superior value for our shareholders and other stakeholders.”
Basic details of the new subsidiary agreement:
- Includes back catalog and new development for Tom Clancy’s Rainbow Six, Assassin’s Creed, and Far Cry franchises
- Tencent to invest €1.16 billion ($1.25 billion) for ~25% minority stake
- Grants worldwide licenses to the aforementioned IPs
- Hoped to be completed before the end of 2025 pending regulatory clearance