China's Tencent buys stake in Ubisoft unit behind Assassin's Creed and more

Tencent already owns about 10 per cent stake in Ubisoft, and it has now partly acquired Ubisoft's subsidiary unit that will run franchises like Assassin's Creed, Far Cry, and Tom Clancy

Chinese gaming studio Tencent is investing about 1.16 billion Euros (Approximately 1.3 billion USD) for a 25 per cent stake in a subsidiary unit of Ubisoft, reported The Verge.

  This spin-off entity will now be running the French game developer’s top-performing games such as Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six. Tencent is valuing this subsidiary unit at about 4 billion Euros (Approximately 4.3 billion USD).

 

Notably, Tencent already owns about 10 per cent of Ubisoft, with the founding Guillemot family owning 15 per cent. This new acquisition of 25 per cent stake in the subsidiary unit is poised to make Tencent a prominent voice in Ubisoft.

 

Ubisoft, while announcing this development, said that they will "focus on building game ecosystems designed to become truly evergreen and multi-platform.” It added: “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.”

 

In the press release, Ubisoft also said: "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."

 

As per Yves Guillemot, Ubisoft’s co-founder and chief executive, this deal marks a “new chapter” for the Paris-based company as it strives to create “evergreen, growing” games.

Ubisoft’s shares fall in past one year

 

Over the past year, Ubisoft’s stock has declined by more than 33 per cent, bringing its market valuation down to 1.7 billion Euros. 

 

Although the company saw a slight boost last week following the long-awaited release of the latest Assassin’s Creed installment—previously postponed—it wasn't enough to offset the overall downturn.

 

This investment from Tencent is expected to help Ubisoft shore up its balance sheet.

 

According to a report by the Financial Times, Tencent has earlier showed interest in gaining more control over Ubisoft’s operations. The report quoted Tencent president Martin Lau as saying: “We see the immense potential for these franchises to evolve into long-term evergreen game platforms and create engaging new experiences for gamers.”