Ubisoft launches new subsidiary for Assassin’s Creed and other big games with funding from Tencent

Ubisoft are attempting to turn around their fortunes, with the creation of a new subsidiary with funding help from Tencent. This new group will have full control over Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six.

Tencent will be investing €1.16 billion for a minority (25%) stake in the new subsidiary, with this subsidiary having a "focus on building game ecosystems designed to become truly evergreen and multi-platform" they say 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 are valuing this new creation at about €4 billion which they said is "implying a FY23-FY25E average sales multiple of around 4x".

This new subsidiary includes all the teams developing Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry based in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia. This includes existing games plus any new games currently under development or planned. This subsidiary has a "worldwide, exclusive, irrevocable, perpetual license in respect of the intellectual property and similar proprietary rights owned or licensable by Ubisoft in relation to Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry in exchange for a royalty".

From the press release:

“Today Ubisoft is opening a new chapter in its history,” said, Yves Guillemot, Co-Founder and Chief Executive Officer. “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.”

Guillemot concluded, “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.”

Martin Lau, President of Tencent, said “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.”