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Ubisoft Partners with Tencent to Launch New Gaming Subsidiary
On January 9, Ubisoft announced the postponement of its highly anticipated title “Assassin’s Creed Shadows,” while simultaneously appointing advisors to explore strategic options for the company’s future.
In a significant development, Ubisoft declared on Thursday the establishment of a new gaming subsidiary, with a substantial investment of 1.16 billion euros (approximately $1.25 billion) from the Chinese technology giant Tencent.
This new subsidiary is expected to concentrate on some of Ubisoft’s most renowned gaming franchises, such as Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six. The investment reflects a deep commitment to enhancing and expanding these acclaimed brands.
Following the announcement, Ubisoft’s shares rose by 10.3% shortly after the European market opened on Friday, indicating positive investor sentiment.
According to a press release issued by Ubisoft, the subsidiary aims to “build game ecosystems designed to become truly evergreen and multi-platform.”
The company further emphasized that this new venture will enhance its capabilities, allowing for improved quality in narrative-driven solo experiences, an expanded range of multiplayer content, and more frequent content releases. Additionally, the integration of free-to-play elements and social features is on the agenda.
Tencent’s investment values the subsidiary at 4 billion euros, positioning it as a strong player in the industry by implying a fourfold multiple based on Ubisoft’s average sales projections for the years 2023 to 2025.
Ubisoft noted that this partnership underscores the considerable value of its intellectual properties (IPs), bolstering the company’s financial health and enabling it to adapt more effectively to the evolving demands of the gaming community. This strategic alignment aims to leverage its creative potential and resource allocation more effectively.
This current move comes on the heels of increased speculation regarding Ubisoft’s trajectory, especially after the company enlisted advisors in January to review its strategic options. This had fueled rumors of a potential sale.
Additionally, recent reports from Bloomberg indicated that Ubisoft was exploring external investments within a new company structure that would encompass its core intellectual properties. Just last year, there were discussions involving Tencent and the founding Guillemot family regarding a possible take-private arrangement.
The announcement of this significant transaction coincides with the release of “Assassin’s Creed Shadows,” the latest installment in Ubisoft’s flagship franchise. The game has been generally well-received, achieving an average score of 82 on the review aggregation platform Metacritic, a testament to Ubisoft’s ongoing commitment to quality game development.
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