Ubisoft will create a new subsidiary for video games like Assassin’s Creed and Far Cry, as the company seeks to restructure amid flagging sales.
Tencent will invest EU€1.16 billion into the subsidiary, which will develop multi-platform video game ecosystems for franchises like Tom Clancy’s Rainbow Six.
“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,” said Ubisoft CEO Yves Guillemot. “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 crystallising the value of our assets, strengthening our balance sheet, and creating the best conditions for these franchises’ long-term growth and success.”
The subsidiary aims to expand multiplayer game offerings and social features for its franchises through frequent content releases, Ubisoft said.
Ubisoft estimated the new company’s preliminary enterprise value at EU€4 billion. With Tencent’s investment, it will acquire a stake of around 25%, though Ubisoft will retain full control.
The company appointed advisors to explore its strategic options in January, following reports of a potential buyout by Tencent or private equity firms.
It has seen a major sales slump in recent months, with net bookings last quarter almost EU€80 below its projected guidance. Revenue also declined by 31.4% last quarter, and the company cut its full-year guidance twice last year.
Ubisoft’s newest major game, Assassin’s Creed Shadows, released last week, and has so far reported more than 3 million players. Despite multiple delays in its launch date, Shadows posted the Assassin’s Creed franchise’s second-highest day one sales revenue, behind previous entry Valhalla.
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