Ubisoft has “accelerated its transformation” by developing a new operating model and subsidiary following a $1.25bn cash “injection” from Chinese megacorp Tencent.
In a bid to “rapidly” evolve its operating model, Ubisoft has created a subsidiary based upon its Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six brands, arguably the developer/publisher’s tentpole franchises. Through a “formal and competitive process,” Ubisoft selected Tencent to invest a minority stake of €1.16bn ($1.25bn) to focus on expanding those games’ “truly evergreen and multiplatform ecosystems.”
The new subsidiary has been granted a “worldwide, exclusive, irrevocable, perpetual license” in respect to the IPs listed above, and includes teams developing those franchises in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia, although it will be headquartered in France and “100% owned” by Ubisoft.
Ubisoft said the $1.25bn investment will be used to “strengthen Ubisoft’s balance sheet by significantly reducing its consolidated net debt position, accelerate the Group’s transformation, and sustain growth of selected franchises.”
“Today Ubisoft is opening a new chapter in its history,” said co-founder and CEO, Yves Guillemot. “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.
“We are committed to building a sharper, more focused organization-one wheretalented teams will take our brands to the next level, accelerate the growth of emerging franchises, and lead innovation in next-generation technologies and services, all with the goal of delivering enriching, memorable games that exceed players’ expectations, and create superior value for our shareholders and other stakeholders,” Guillemot concluded.
Tencent president Martin Lau added: “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.”
Despite a significant 51.8% decline year-on-year in net bookings for Q3, Ubisoft’s most recent financial report highlighted that this was in line with its revised expectation of €300 million for the period.
Ubisoft remained optimistic about its next quarter, and is expecting net bookings to increase following the release of Assassin’s Creed Shadows, which released on March 20.