Ubisoft Launches New Subsidiary for Major IPs with Tencent's €1.16B Investment

Ubisoft has recently established a new subsidiary focused on its flagship franchises: Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six, with a significant investment of €1.16 billion (approximately $1.25 billion) from Tencent. This move comes right after the successful launch of Assassin's Creed Shadows, which has already attracted over 3 million players. The backdrop to this announcement includes Ubisoft's struggles with several high-profile flops, layoffs, studio closures, and game cancellations, culminating in a historic low for the company's share price. The pressure on Assassin's Creed Shadows to perform well is immense.

This newly formed subsidiary, valued at €4 billion (around $4.3 billion) and headquartered in France, aims to develop game ecosystems that are "truly evergreen and multi-platform." Tencent's investment equates to a 25% stake in the subsidiary. Ubisoft's goal is to enhance the quality of narrative solo experiences, expand multiplayer offerings with more frequent content updates, introduce free-to-play elements, and incorporate more social features.

Ubisoft plans to concentrate on the growth of its Ghost Recon and The Division franchises while also pushing the boundaries of its top-performing games. Yves Guillemot, Ubisoft's co-founder and CEO, emphasized that this initiative marks a new chapter for the company, aiming to transform its operating model to be more agile and ambitious. The focus will be on building robust game ecosystems, growing high-performing brands, and creating new IPs utilizing advanced and emerging technologies.

The subsidiary will manage the development teams for Rainbow Six, Assassin’s Creed, and Far Cry located in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia, alongside Ubisoft’s back-catalog and future projects. This suggests that existing projects are secure, and there is no immediate indication of further layoffs. The transaction is slated to be finalized by the end of 2025.

This strategic move is designed to strengthen Ubisoft's balance sheet, enhance the long-term growth and success of its key franchises, and foster a more focused and innovative organization. The overarching aim is to deliver exceptional gaming experiences that exceed player expectations and create significant value for shareholders and stakeholders alike.