Ubisoft Announces New Subsidiary And Injection Of €1.16BN From Chinese-Owned Tencent

Ubisoft announced a brand new subsidiary “based on its Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six brands” and that it will be supported by an injection of €1.16 billion from Chinese-owned Tencent.

In a press release, Ubisoft said that the injection of €1.16 billion from Tencent comes in exchange “for a minority stake in the new subsidiary.” That minority stake is 25% economic interest.

It goes on to detail that the 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 new subsidiary will “include teams developing the Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry franchises based in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia as well as the back-catalog and any new games currently under development or to be developed.”

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Ubisoft CEO Yves Guillemot said 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,” he added. “With its dedicated and autonomous leadership team, it will focus on transforming these three brands into unique ecosystems.”

“We are committed to building a sharper, more focused organization-one where talented teams will take our brands to the next level, accelerate the growth of emerging franchises, and lead innovation in next-generation technologies and services, all with the goal of delivering enriching, memorable games that exceed players' expectations, and create superior value for our shareholders and other stakeholders,” Guillemot concluded.

Tencent President Martin Lau also stated, “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.”

This announcement comes about a week after the release of Assassin’s Creed Shadows. It also comes as Ubisoft announced it achieved 3 million players for the game.

The company also reported the game had the “2nd highest Day 1 sales revenue in Assassin’s Creed franchise history” as well as the “biggest Ubisoft Day 1 ever on PlayStation Digital Store.”

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While Ubisoft is attempting to paint a narrative of success, the game’s Steam peak player counts are mediocre at best. The game hit an all-time peak concurrent player count of 64,825 on Sunday.

This is worse than Dragon Age: The Veilguard, which hit a peak concurrent of 89,418 in its first weekend.

Electronic Arts would eventually admit the game was a commercial failure and missed sales expectations by nearly 50%. The company stated, “Separately, Dragon Age engaged approximately 1.5 million players during the quarter, down nearly 50% from the company’s expectations.”

What do you make of Ubisoft creating this new subsidiary and injection of cash from the Chinese-owned Tencent?

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