Following a troubled year marked by rapidly declining share value, Ubisoft and its partner Tencent have spun out its biggest franchises into a new subsidiary. The Chinese conglomerate will invest around $1.25 billion (€1.16 billion) in the subsidiary, which will earn them a roughly 25% stake.
The new subsidiary is valued at $4.3 billion (€4 billion) and will be the new home of Assassin’s Creed, Far Cry, and Rainbow Six franchises. It was disclosed that the new subsidiary will be “backed by greater investment and boosted creative capabilities” that will help propel each of the franchises forward.
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According to Ubisoft, 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.”
“Today Ubisoft is opening a new chapter in its history,” Ubisoft co-founder and CEO Yves Guillemot said in a statement. “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.”
What will happen to the other Ubisoft IPs?
CEO of French video game publisher Ubisoft, Yves Guillemot, poses during a photo session at the Ubisoft headquarters in Montreuil, outside Paris, on April 5, 2018. (Photo by CHRISTOPHE ARCHAMBAULT / AFP)
As you already know, Ubisoft has a large portfolio of games including Skull and Bones, Avatar, Prince of Persia, Star Wars, Ghost Recon, Watch Dogs, and many others.
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With the emphasis on Far Cry, Rainbow Six, and Assassin’s Creed the biggest question is what happens to other franchises. Ubisoft dispelled that fear saying they will continue to work on the other IPs.
“In parallel to the creation of this new entity, Ubisoft will focus on nurturing the development of iconic franchises including Tom Clancy’s Ghost Recon and The Division, 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,” the company said.
The subsidiary will have an independent leadership team that will report to a Board controlled by Ubisoft. What is yet to be determined is how many of its 17,000 employees will move to the new subsidiary. Hopefully, this will not lead to another mass layoff.
