Tencent is committing $1.25 billion to a new Ubisoft subsidiary that will concentrate on Assassin's Creed, Far Cry, and Rainbow Six
In a move to expedite its business transformation, Ubisoft has set up a new operating structure and subsidiary after securing a $1.25 billion cash investment from the major Chinese corporation Tencent.
To swiftly revamp its operational approach, Ubisoft has launched a subsidiary centered around its primary franchises: Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six. The decision to engage Tencent, securing a minority investment of €1.16 billion ($1.25 billion), was made via a "formal and competitive process." This investment aims to expand these games into comprehensive "evergreen and multiplatform ecosystems."
This newly formed entity has been granted a "worldwide, exclusive, irrevocable, perpetual license" for the aforementioned intellectual properties. It includes franchise development teams located in cities like Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia, while being headquartered in France. The subsidiary remains "100% owned" by Ubisoft.
The $1.25 billion from Tencent will be directed towards decreasing Ubisoft’s net debt, enhancing the company’s financial stability, accelerating its strategic transformation, and fostering the growth of key franchises.
Yves Guillemot, Ubisoft's co-founder and CEO, stated, "Today marks a new era for Ubisoft as we intensify the company’s strategic shift. Establishing this subsidiary represents a crucial step in revamping our operating model to achieve agility and ambition. Our aim is to create robust game ecosystems that remain relevant over time, build high-performing brands, and introduce new intellectual properties driven by cutting-edge and emerging technologies."
Furthermore, Guillemot emphasized, "With this subsidiary dedicated to our three most significant franchises and Tencent joining as a minority partner, we are leveraging our assets, enhancing our financial position, and setting the stage for enduring growth and success. The subsidiary, equipped with its own leadership, will aim to transform these franchises into distinct ecosystems."
Guillemot added that Ubisoft is committed to honing its organization, allowing teams to elevate brand potential, boost emerging franchises, and lead innovations in the latest technologies and services with the mission of offering enriching, memorable games that surpass player expectations and generate substantial value for shareholders and stakeholders.
Tencent's president, Martin Lau, remarked, "We are enthusiastic about deepening our partnership with Ubisoft through this investment, which underscores our sustained confidence in Ubisoft's creative capabilities and exceptional team to ensure continual success in the gaming industry. There is tremendous potential for these franchises to evolve into lifelong gaming platforms, offering exciting new experiences for players."
Despite experiencing a notable 51.8% drop in net bookings year-over-year for the third quarter, Ubisoft's latest financial report indicated that this decline aligned with its adjusted forecast of €300 million for that timeframe. The company remains hopeful for the upcoming quarter, anticipating an increase in net bookings spurred by the recent launch of Assassin's Creed Shadows on March 20.
