Ubisoft Might Be Split Up by Tencent!

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Summary

  • Ubisoft and Tencent are reportedly considering a joint asset venture.
  • The move would essentially see Ubisoft broken apart, although the two companies haven’t yet decided on which assets would be part of the hypothetical venture.
  • Ubisoft breaking apart by launching a spinoff venture would possibly prevent it from going private, which is something that was previously considered.

According to recent reports, gaming giants Ubisoft and Tencent are contemplating a joint business venture. This proposed collaboration could potentially involve the separation of Ubisoft into separate assets, serving as a possible option for Tencent to financially support Ubisoft’s private acquisition if the company is facing financial difficulties.

After the pandemic, Ubisoft, a well-known developer and publisher, has faced tough times with several high-budget games not meeting commercial expectations. This series of flops has led to a significant decrease in their stock value – over 80% since the start of the 2020s. However, a lower stock price can make it easier for companies like Ubisoft, which are struggling, to become privately owned. Indeed, Ubisoft announced in late 2024 that they were considering various strategies for their future, as their share price was at a 12-year low during this time. It was also reported around then that Ubisoft was mainly investigating the possibility of obtaining funding for a potential private takeover by Tencent, a Chinese entertainment conglomerate which already owns a minority stake in Ubisoft.

According to sources familiar with their discussions, Tencent and Ubisoft are exploring a potential partnership where they might create a joint venture involving some of Ubisoft’s assets. If this plan comes to fruition, Tencent would acquire a portion of this proposed spin-off, potentially increasing its stake in Ubisoft from the current 10%. However, no final agreement has been reached yet. Both parties are still determining which assets will be included in their hypothetical joint venture and assessing its potential value.

Ubisoft May Not Go Private If It Gets Broken Apart

As a gamer, I’ve been hearing whispers that Tencent might be considering buying into Ubisoft for a significant boost in their own value. If this plan to split up Ubisoft were to go through, it could mean the company remains public, which is becoming more likely as Ubisoft’s stock takes a dive.

In a hypothetical scenario, this joint venture with Ubisoft could provide Tencent with greater authority over specific Ubisoft titles, thereby fueling its expansion in the global video game market beyond its domestic base. This collaborative effort might encompass some of Ubisoft’s premier franchises, such as Assassin’s Creed, which are highly attractive to a prominent investor like Tencent.

Ubisoft’s most recent blockbuster game was “Assassin’s Creed Valhalla,” released at the end of 2020 and earning over $1 billion in revenue. The next installment in the series has been postponed twice to ensure a top-notch launch, and as a result, “Assassin’s Creed Shadows” is now scheduled for March 20. This move gives Ubisoft an 11-day window during their current fiscal year, which ends on March 31, to enhance their financial status.

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2025-01-15 18:46