Ubisoft, Tencent Establishes New Subsidiary In €1.16 Billion Investment

The state of Ubisoft the past year has appeared rather grim for the video game publisher. Despite continuing its investment into AAA projects, the firm has come short on its efforts. We’ve witnessed this as it has issued layoffs for its studios including to closure of one U.K. team last year. Reports then were also commenting on a looming acquisition from Chinese firm, Tencent.

The hovering connotation aimed at Ubisoft also led to false reports on the closure of Ubisoft Montpellier. The report did go on to indicate the team is working on three separate IPs from Ubisoft’s library. On the upside, Ubisoft appears to be bouncing back with the release of Assassin’s Creed Shadows with 3 million players already exploring its new Feudal Japan setting. 

In a recent development, Ubisoft announces that in a new arrangement with Tencent it will be accepting an €1.16 billion investment from the firm as part of a new effort establishing a subsidiary between both parties. The minority stake will grant Tencent 25 percent ownership.

“This new subsidiary will focus on building game ecosystems designed to become truly evergreen and multi-platform. Backed by greater investment and boosted creative capacities, it will drive further increases in quality of narrative solo experiences, expand multiplayer offerings with increased frequency of content release, introduce free-to-play touchpoints, and integrate more social features,” the press release reveals. 

It adds: “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.”

CEO Yves Guillemot injects in a statement: “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.”

What are your thoughts on this deal between Ubisoft & Tencent?

Source: Ubisoft