Reports Indicate Chinese Firm Tencent Is Bidding For Control Of Ubisoft And Properties Like Assassin's Creed
Ubisoft has been showing trends of financial problems for some time. Now, it’s being rumored that Tencent might be taking over operations of games like Assassin’s Creed and other properties.
Fan reaction to Assassin’s Creed: Shadows has highlighted massive problems at Ubisoft as the company appears to be another bloated AAA developer who doesn’t know how to appeal to their target audience. Recent financials have showed lean times for the developer and stock prices have nearly halved since last year.
Part of the problem is extremely expensive games like Star Wars: Outlaws failed to resonate with gamers, and with hundreds of millions of dollars spent in development, it becomes a loss for the company, which needs the funds to return to build the next batch of games.
Assassin’s Creed: Shadows has been controversial since it was first announced they would feature a black samurai protagonist, Yasuke, in what they originally billed as a historically accurate Japanese game. As details came out about the game, it became clear that this was meant as a diversity, equity, and inclusion offering and that Ubisoft cut corners when it came to actually presenting historical Japan.
Rumors swirled last year that Ubisoft was intentionally tanking their share prices to make it easy for investors like Tencent to take over. In September 2022, the company acquired a 49.9% share of the company with 5% voting rights in Ubisoft’s parent company, Guillemot Brothers Limited.
New reports state that Tencent has been working on a takeover. Whether these failures of big AAA properties were intentional or just incompetence is all speculation, but it appears this takeover of the company by the Chinese tech giant is part of the plan.
According to a report from Bloomberg, Ubisoft has been looking for investors to come in and right the ship of the gaming company, which will require taking control of several of its I.P.s, including Assassin’s Creed.
While nothing has been finalized as of yet, Ubisoft is currently collecting bids and is going to be deciding by the end of the month.
Tencent has been in the discussion for a long time as a near-majority shareholder already who is looking to expand their base of operations. As of now, despite owning 49.9% of the shares, Tencent has limited say in how the company manages itself. This would change under the new proposed structure.
Ubisoft’s Q3 financials also confirm that Ubisoft is looking to sell off their company, saying, “The review of various transformational strategic and capitalistic options is now ongoing. The Board has established an ad-hoc independent Committee to oversee this formal and competitive process, so as to extractthe best value from Ubisoft’s assets and franchises for all stakeholders. The Committee is composed of three independent Directors and chaired by Lead Independent Director, Claude France. As previously indicated, Ubisoft will inform the market in accordance with applicable regulations if and once a transaction materializes.”
A lot of Ubisoft’s current worth will be determined by the launch of Assassin’s Creed: Shadows soon, but early indicators are not looking good for the game.
What do you think of Tencent potentially buying out Ubisoft and taking control of properties like Assassin’s Creed? Leave a comment and let us know.
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Well, we don't have all the details, but if what has been communicated is true, it would be a classic case of tunneling, i.e. a fraud in which valuable assets are siphoned out of a company, which is then left as a husk to wither away. I am pretty sure it is illegal in pretty much all the civilised economies, so Ubisoft should tread VERY carefully - again, provided all the public info is true.
I should also point out that tunneling was an extremely prevalent crime in ex-communist countries in the 90's and early 00's, where this type of fraud gained infamy. As many people watching this company know, following the last year's open letter by AJ Investments, minority investors have been mulling legal action against the Guillemots and Ubisoft. Since AJ is a Slovak investment firm, I'd guess they are extremely familiar with this type of fraud since they lived through that Wild East period and I'd say this move by the Guillemots might backfire spectacularly. Fingers crossed!
If they are bought out by the CCP they will remain an enemy.