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Ubisoft is to create a spin-off gaming subsidiary with an investment of 1.16 billion euros (£1bn) from Chinese tech giant Tencent, in a move that Ubisoft said would help it become “more agile”.
The new spin-off is to encompass the development of some of Ubisoft’s best-known games, including Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six, the company said.
The move follows questions over Ubisoft’s future in recent months, following delays of some high-profile games and disappointing performance of others.
‘More agile’
Tencent is expected to hold about one-quarter of the new company, with Ubisoft holding the rest, making it Ubisoft’s second-largest shareholder with a stake of about 10 percent.
“Today Ubisoft is opening a new chapter in its history,” said Ubisoft co-founder and chief executive Yves Guillemot.
Ubisoft said the spin-off would give it a cash infusion that would boost its ability to improve game quality and add new features.
“It highlights the strong value of Ubisoft’s IPs, significantly reinforces its balance sheet, and enables the company to continue its efforts to become a more agile organisation,” Ubisoft said in a statement.
The Tencent investment values the unit at 4bn euros, implying a 4x multiple based on average sales from full-year 2023 to 2025, Ubisoft said.
Ubisoft will now focus on its other well-known titles, such as Tom Clancy’s Ghost Recon and The Division.
The company earlier this month released the long-awaited game Assassin’s Creed: Shadows following multiple delays.
The Assassin’s Creed series has sold more than 200 million copies worldwide and generated about 4bn euros from 2014 to 2024, the company said last year.
Cash infusion
Speculation has swirled around the future of Ubisoft in recent months, as its sagging share price made it a potential buyout target.
Last October the company’s shares spiked 35 percent on speculation of a potential take-private deal funded by Tencent and the firm’s founding Guillemot family.
In January Ubisoft reportedly appointed advisors to review its strategic options, leading to rumours of a potential sale.
Tencent is itself one of the world’s biggest video game developers, as well as being known for “super app” WeChat, and is China’s valuable company.
