Tencent hand Ubisoft a big wad of cash to spin out Assassin’s Creed, Far Cry, and Rainbow Six as a separate business
Well, there you have it folks. After months of uncertainty over share price falls, major game delays and squabbles with investors, Ubisoft have opened up a new subsidiary to look after their biggest-selling Assassin’s Creed, Rainbow Six, and Far Cry games, with Tencent chucking in a whopping €1.16 billion – meaning that the latter will have a 25% stake in the new spin-off business when all is said and done.
Ubisoft’s board have been publicly weighing up a major transaction of some kind since January, with Tencent and the company’s founding Guillemot brothers tipped to be in cahoots. The deal announced today is essentially about carving out the parts of Ubisoft’s business that make the most money, with Tencent pouring cash into those bits rather than other, less prosperous series such as Ghost Recon and Prince Of Persia. The subsidiary will serve as the main business unit for all Assassin’s Creed, Rainbow Six, and Far Cry development teams based in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia.
The press release announcing the new subsidiary adds that Tencent’s investment will “strengthen Ubisoft’s balance sheet by significantly reducing their consolidated net debt position,” something the developer has struggled with after a string of flops like XDefiant and Skull and Bones.
But how will the relationship between Ubisoft and this new spin-off entity work? According to the release, the subsidiary will have a “dedicated and autonomous leadership team”, but it’ll still report up to Ubisoft CEO Yves Guillemot, which leaves things fuzzy. The release is equally vague about how all this could affect the direction of future Assassin’s Creed, Far Cry and Rainbow Six games. It claims the new subsidiary 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.”
As for the parts of Ubisoft that aren’t part of the subsidiary, there’s talk of “accelerating the growth of top performing titles and leveraging disruptive technologies on selected new IPs, while continuing to deliver state-of-the-art production game engines and online services.” Again, all very open-ended for the moment.
Only time will tell whether all this will pay off for Ubisoft and Tencent, but Ubisoft’s latest Assassin’s Creed, at least, has been a big hit since it launched last week, attracting over three million players. I imagine between that and the Tencent deal, Ubisoft management will be sleeping a little easier tonight.