Ubisoft has announced a significant step in its transformation, following a $1.25B investment from Chinese tech giant Tencent. This move is part of Ubisoft's strategy to rapidly evolve its operating model, with a particular focus on expanding its major franchises into "evergreen and multiplatform ecosystems."
As part of this shift, Ubisoft has created a new subsidiary dedicated to its flagship franchises, including Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six. These three franchises have long been the backbone of Ubisoft's portfolio, and the new subsidiary aims to develop them further by leveraging cutting-edge technology and emerging trends.
In a "formal and competitive process," Ubisoft selected Tencent to invest approximately $1.25B into this subsidiary. The new entity has been granted a "worldwide, exclusive, irrevocable, perpetual license" for these iconic IPs, and will include teams located in various Ubisoft studios across Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia. While the subsidiary will be headquartered in France, it will remain "100% owned" by Ubisoft.
Ubisoft stated that the $1.25bn cash injection would help strengthen the company’s balance sheet, reduce its consolidated net debt, accelerate the transformation of its operating model, and support the growth of these key franchises.
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"Today Ubisoft is opening a new chapter in its history," said Yves Guillemot, co-founder and CEO of Ubisoft. "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."
Guillemot continued, "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."
He added, "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."
Tencent’s president, Martin Lau, expressed enthusiasm about the new partnership, stating, "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."
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