Ubisoft has announced the formation of a new subsidiary that will consolidate its major game franchises, including Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six. More interestingly, this initiative is supported by a €1.16 billion investment from Chinese conglomerate Tencent, which will acquire a 25% minority stake in the new entity.
The France-based renowned video game developer also revealed that the subsidiary is valued at around €4 billion and is expected to be fully established by the end of 2025. Also, the subsidiary will manage both existing titles and upcoming projects within these franchises (like Assassin’s Creed, etc).
The development comes at a time when Ubisoft faced several financial challenges in recent years. The company has experienced a downturn in financial performance, marked by reduced revenues and a significant drop in share prices. These issues have been attributed to factors like delayed game launches (including Assassin’s Creed Shadows). The gaming giant also faced setbacks with its latest games like “Star Wars Outlaws,” which did not meet sales expectations.
In terms of numbers, during the third quarter of fiscal year 2024-25, Ubisoft reported net bookings of €301.8 million, representing a 52% decrease compared to the same period in the previous year. In fact, the company experienced a 22% year-over-year decline in net bookings, totaling €642 million in the first half of FY25. Digital revenue also decreased by 27% to €527 million.
And now, it seems that to address these challenges and strengthen its financial position, Ubisoft has taken its latest action by forming a new subsidiary with Tencent. Actually, the infusion of capital from Tencent is intended to help Ubisoft reduce debt and provide resources to support the development of its major franchises.
Speaking of the structure of this newly formed entity, development teams from various Ubisoft studios (including those in Montreal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia) will be integrated into the new organization.
Meanwhile, Ubisoft’s CEO – Yves Guillemot stated that this strategic move aims to enhance the company’s financial stability and promote long-term growth for its key brands. The development becomes significant considering the global gaming market is projected to reach $691.31 billion by 2029.
“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 said in his statement. In the meantime, Tencent is also investing heavily in artificial intelligence (AI) to remain competitive, including its rumoured potential partnership with Apple to provide AI features for the iPhones in China.
