Ubisoft Creates New Subsidiary for Major IPs with €1.16B Tencent Investment

Ubisoft has recently announced the creation of a new subsidiary focused on its Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six brands, backed by a significant €1.16 billion (approximately $1.25 billion) investment from Tencent. This news follows closely on the heels of the successful launch of Assassin's Creed Shadows, which has already surpassed 3 million players. The timing is critical for Ubisoft, which has faced numerous challenges including high-profile flops, layoffs, studio closures, and game cancellations, leading to a historic low in its share price.

The newly formed subsidiary, valued at €4 billion (approximately $4.3 billion) and headquartered in France, aims to develop "game ecosystems designed to become truly evergreen and multi-platform." Tencent will hold a 25% stake in this venture. Ubisoft's strategy with this subsidiary includes enhancing the quality of narrative solo experiences, expanding multiplayer offerings with more frequent content releases, introducing free-to-play elements, and integrating more social features.

Ubisoft also plans to concentrate on the development of its Ghost Recon and The Division franchises while continuing to grow its top-performing games. Yves Guillemot, co-founder and CEO of Ubisoft, described this move as a pivotal moment in the company's history, emphasizing a transformation towards a more agile and ambitious operating model. The goal is to build strong, evergreen game ecosystems, grow high-performing brands, and innovate with new IPs using cutting-edge technologies.

The new subsidiary will encompass the development teams for Rainbow Six, Assassin’s Creed, and Far Cry located in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia, along with Ubisoft’s back-catalog and any new games in development. This suggests that existing projects are secure, and there are no immediate plans for further layoffs. The transaction is slated to be completed by the end of 2025.

This strategic move by Ubisoft, with Tencent's investment, aims to solidify the company's position in the gaming industry by focusing on long-term growth and success of its major franchises, while also fostering innovation and delivering exceptional gaming experiences to players.