Imagine my shock.
Things haven’t exactly been going great for Ubisoft lately. Their AAAA game Skull and Bones was incredibly costly to develop, reportedly costing somewhere between $650-$850 million, and has likely not recouped that loss yet, if it ever will.
Anyway, they’ve also got Assassin’s Creed Shadows, which has repeatedly put them in the crapper over the past several months, has 2 whole hours of credits, and likely cost way more than its current 3 million sales will actually cover.
So, taking all into consideration, it’s no surprise that Ubisoft accepted an investment from Tencent to the tune of €1.16 billion (~$1.25 billion) to form a subsidiary for their biggest IPs. According to Ubisoft, the new subsidiary, based in France (natch), is valued at €4 billion (~$4.3 billion) and will focus on “building game ecosystems designed to become truly evergreen and multi-platform.” Tencent owns a 25% stake in the new subsidiary.
Today, Ubisoft announced that it is accelerating its transformation by taking
an important step in rapidly evolving its operating model with the creation of a dedicated subsidiary based on its Assassin’s Creed®, Far Cry®, and Tom Clancy’s Rainbow Six® brands. Following the formal and competitive selection process initiated by the Group earlier this year, Tencent’s will invest €1.16bn for a minority stake in the new subsidiary. This new subsidiary will focus on building game ecosystems designed to become truly evergreen and multi-platform. Backed by greater investment and boosted creative capacities, it will drive further increases in quality of narrative solo experiences, expand multiplayer offerings with increased frequency of content release, introduce free-to-play touchpoints, and integrate more social features.
Ubisoft went on to say that it will “focus” on development for franchises like The Division and Ghost Recon, among other top IPs.
Today Ubisoft is opening a new chapter in its history. 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.
Yves Guillemot, co-founder and chief executive officer of Ubisoft
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 where talented 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.
So, what does all of this mean realistically? Well, the teams for most of these franchises are probably safe, for the time being. Probably. What it means for the games themselves though is unclear. I see passages like “accelerating the growth of top performing titles and leveraging disruptive technologies on selected new IPs” and it doesn’t exactly scream good times for the end user to me. They already aggressively monetize their games, so hearing they’re going to go harder doesn’t exactly bode well. Also, Tencent’s gonna want that money back eventually (it’s an investment), so I don’t think their previous strategy is exactly going to work.
They expect this transaction to complete sometime this year.
Source: IGN
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