Ubisoft announced on Thursday that it is forming a new dedicated subsidiary for its core IPs such as “Assassin’s Creed”, “Far Cry” and “Rainbow Six” to achieve operational transformation. The new entity will receive an investment of 1.16 billion euros (approximately Rs. 10,694 crore) from Chinese conglomerate Tencent, which will hold a minority stake in the unit. The move represents Ubisoft’s efforts to combat a drop in its stock price due to failed launches and its intention to focus on its biggest franchises.
Ubisoft and Tencent form new subsidiary
The unit, backed by fresh investments, is valued at €4 billion (approximately Rs 36,878 crore) and is headquartered in France. Ubisoft said Tencent’s stake in the subsidiary will reach about 25%. The company added that the newly formed entity strengthens Ubisoft’s balance sheet by “significantly reducing” debt. The subsidiary will continue to be exclusively controlled and consolidated by Ubisoft.
“Backed by greater investment and enhanced creative capabilities, it will further improve the quality of single-player narrative experiences, expand multiplayer offerings through increased frequency of content releases, introduce free-to-play touchpoints, and integrate more social features,” Ubisoft said in a press release. The subsidiary “will focus on building a “truly evergreen and multi-platform” gaming ecosystem around the company’s largest franchises.
The new unit will be made up of Ubisoft teams located in Montreal, Quebec, Sherbrooke, Saguenay, Barcelona and Sofia and will be responsible for the development of Rainbow Six, Assassin’s Creed and Far Cry games. The subsidiary will also house Ubisoft’s past games as well as any new games currently in development or about to be developed, the company said. Ubisoft is developing multiple “Assassin’s Creed” projects, including a new game “Assassin’s Creed Hexe”, remakes or remakes of several old games, a mobile game, and more.
Ubisoft has decided to change the operating model of its most profitable business after a difficult year marked by studio closures, layoffs and project cancellations. The company’s stock price fell 40% in 2024 after back-to-back disappointing releases in “Avatar: Pandora’s Frontier” and “Star Wars Desperados,” two AAA games based on popular external IPs. The company’s largest shareholders, the founding Guillemot family, have reportedly been exploring talks with Tencent and other investors on an acquisition deal that would allow them to retain control of its franchise.
“New Chapter”
“Today, Ubisoft opens a new chapter in its history,” said Yves Guillemot, co-founder and CEO of Ubisoft. “As we accelerate the company’s transformation, this is a fundamental step in changing Ubisoft’s operating model that will make us both agile and ambitious. We are focused on building a strong gaming ecosystem that aims to become evergreen, grow high-performing brands, and create new IP driven by cutting-edge and emerging technologies.
“By establishing dedicated subsidiaries to lead the growth of our three largest franchises, and with the addition of Tencent as a minority investor, we are crystallizing the value of our assets, strengthening our balance sheet, and creating the best conditions for the long-term growth and success of these franchises. With its dedicated, autonomous leadership team, it will be focused on transforming these three brands into unique ecosystems.”
The announcement comes a week after Ubisoft released Assassin’s Creed: Shadows. The company had been counting on the action-RPG to be a hit after its most recent release failed to meet sales expectations. Assassin’s Creed: Shadows endured two delays before finally launching on PC, PS5, and Xbox Series S/X on March 20. The game’s launch was a success, attracting over 3 million players.
Ubisoft confirmed Thursday that Shadow has generated the second-highest first-day sales in the history of the Assassin’s Creed franchise and the company’s largest launch on the PlayStation Digital Store.