French publisher Ubisoft is embarking on an ambitious journey with the establishment of a new subsidiary focused exclusively on its flagship franchises. In a recent communication to investors, the company revealed that this new entity will oversee the beloved Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six intellectual properties, encompassing both forthcoming titles and the extensive back catalog.
Strategic Focus and Investment
The primary objective behind this initiative appears to be a heightened commitment to these core franchises, allowing for increased investment and development. This subsidiary will hold licenses for the aforementioned franchises, which will require it to pay royalties to Ubisoft, ensuring a continuous flow of revenue back to the parent company.
In a significant move, Tencent, the Chinese tech and entertainment powerhouse, has injected €1.16 billion (.25 billion) into this new subsidiary, securing a 25 percent stake at a valuation of approximately €4 billion (.3 billion). This investment raises intriguing questions, particularly when considering that Ubisoft’s entire market capitalization currently stands at around €1.91 billion ( billion). Observers are left pondering why Tencent opted for a substantial investment in a segment of Ubisoft rather than pursuing a full acquisition of the company.
“Today Ubisoft is opening a new chapter in its history,” remarked Yves Guillemot, co-founder and CEO of Ubisoft. “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.”
Tencent’s president, Martin Lau, expressed enthusiasm about the partnership, stating, “We are excited to extend our longstanding partnership with Ubisoft through this investment, which reflects our continued confidence in Ubisoft’s creative vision and exceptional talent to drive sustained success in the industry. We see the immense potential for these franchises to evolve into long-term evergreen game platforms and create engaging new experiences for gamers.”
This development follows earlier reports indicating that Tencent and Ubisoft were exploring the possibility of spinning off certain intellectual properties into a separate entity. Additionally, there have been discussions regarding potential sales of some of Ubisoft’s IP to major players like Microsoft and EA, hinting at a broader strategic realignment within the company.
Disclaimer: Alex Calvin is a freelance journalist and writer who has worked with Ubisoft in the past
