China's Tencent saved Ubisoft? New subsidiary established worth €4 billion

Ubisoft Entertainment SA, one of France's largest video game production companies, announced on Thursday the creation of a new subsidiary valued at approximately €4 billion ($4.3 billion). The new company will manage popular game franchises such as Assassin's Creed, Far Cry, and Tom Clancy’s Rainbow Six.

Details of the partnership with Tencent

Under a strategic partnership, the Chinese technology giant Tencent Holdings Ltd will invest €1.16 billion, acquiring a 25% stake in the new entity. In return, Tencent will receive licenses to use the intellectual property of these well-known franchises, paying appropriate licensing fees. The new company will oversee not only the teams responsible for the mentioned titles but also Ubisoft’s entire existing game catalog and future productions currently in development.

Strategic importance for Ubisoft

The establishment of this subsidiary marks a significant step for Ubisoft, a company founded by the Guillemot family. The value of the new entity exceeds Ubisoft’s current market value, highlighting the significance and strategic importance of this move for the company's future growth. This announcement positively impacted the market, causing Ubisoft’s stock price to rise nearly 10% in today's trading session. Ubisoft has faced challenges in recent years, including internal issues, financial difficulties, and delays in releasing key titles, making this move particularly crucial for the company's future.

Comment from Ubisoft’s CEO

Ubisoft CEO Yves Guillemot expressed considerable optimism regarding the decision: "Today, Ubisoft opens a new chapter in its history. This is a fundamental step toward changing our operational model, allowing us greater flexibility and enabling us to achieve ambitious goals."