Ubisoft and Tencent create standalone subsidiary for Assassin’s Creed, Far Cry and Rainbow Six

Tencent has invested €1.16 billion into the new group and owns a 25% stake

Ubisoft’s biggest franchises are now part of a new subsidiary that will be partly owned by Tencent.

The Chinese conglomerate will invest €1.16 billion ($1.25bn) in the subsidiary, which has been valued at €4 billion ($4.3bn). That means Tencent owns around 25% of the new division. Tencent is already a major investor in Ubisoft, with a 10% stake in the French games publisher, with the Guillemot family owning 15%. Tencent also owns a large stake in the Guillemot family’s holding company.

The new subsidiary will cover Ubisoft’s major franchises, namely Assassin’s Creed, Far Cry and Rainbow Six. Teams that will sit under the new division include staff at Ubisoft’s Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia offices. The firm is still to work out exactly how many of its 17,000 employees will sit under the new spin-off, as not all staff at these studios work on those three IPs.

The subsidiary will have its own independent leadership team, although it will continue to report to a Board that is controlled by Ubisoft.

The firm’s latest Assassin’s Creed game, Assassin’s Creed Shadows, was released last week and has already amassed 3m players.

Ubisoft believes this deal will not just strengthen its finances, but will enable it to become a more agile organisation so it can “unleash the full creative potential of its teams and better align its resources with the constantly evolving expectations of players.”

“We see the immense potential for these franchises to evolve into long-term evergreen game platforms and create engaging new experiences for gamers.”

Martin Lau, Tencent

The news follows Ubisoft’s announced plans to explore various strategic options earlier this year due to a tough financial period, which saw disappointing sales for the games Skull and Bones, XDefiant, and Star Wars Outlaws.

The core Ubisoft business unit will now focus on developing new Tom Clancy: Ghost Recon and The Division titles, alongside other top performing games and ‘selected new IPs’. Outside of the three core franchises in the subsidiary, Ubisoft games currently in development include Anno 117, Prince of Persia: The Sands of Time remake, Beyond Good & Evil 2 and Splinter Cell.

Ubisoft said it would provide more information on its future operating model “at a later stage”.

“Today Ubisoft is opening a new chapter in its history,” 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. With its dedicated and autonomous leadership team, it will focus on transforming these three brands into unique ecosystems.”

Tencent president Martin Lau added: “We see the immense potential for these franchises to evolve into long-term evergreen game platforms and create engaging new experiences for gamers.”

The transaction is expected to complete by the end of the year.