Ubisoft And Tencent Joins Forces in $4.3 Billion Subsidiary

In an expected move to strengthen its balance sheet, French game developer and publisher Ubisoft announced on March 27, 2025 that it will join forces with Chinese tech giant Tencent in a subsidiary that will hold control over Ubisoft key IPs.

Tencent will reportedly take a 25% stake in the new venture which is expected to be established before the end of this year. Among the main assets that will be transferred over to the joint subsidiary are the Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six franchises.

“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,” said, Yves Guillemot, Ubisoft Co-Founder and Chief Executive Officer, in a statement.

Year-on-year in March, Ubisoft’s market capitalization has dropped from approximately $3.17 billion to $2.05 billion, or 35.4% and the same can be said for the company’s share price which has declined by the same percentage from March, 2024 to $13.92 per share on March 27, 2025.

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.”

AJ Investments is a Slovakian hedge fund that holds slightly less than 1% of Ubisoft shares. Though being a minority shareholder, the investor has been very vocal about pushing for a sale of Ubisoft and restructuring the company’s management.

CEO of AJ Investments, Juraj Krupa, who recently called for a protest outside of Ubisoft’s office in Paris following rumors of Ubisoft being in talks with third-party buyers without informing its investors told Eneba after the announcement regarding the subsidiary deal with Tencent that there are still a lot of unknowns.

“We expected something like this would happen. It may be a little rushed but overall I think it’s going to be positive for the company’s (Ubisoft) balance sheet,” Krupa said and added: “We still have to wait for more details and approvals from regulatory bodies.”

Recent Ubisoft IP Controversy

The launch of Ubisoft’s latest installment in the Assassin’s Creed franchise, Assassin’s Creed: Shadows has been met with a lot of controversy and even reached heated reactions from Japanese top ranking politicians as that’s the country where the game takes place.

It was possible for players to destroy sacred Japanese shrines which prompted the Japanese Prime Minister Shigeru Ishiba to address the importance of respecting cultural and religious practices.

Ubisoft released a patch overnight in response, making specific game environments and items in temples and shrines indestructible.

Another controversy involves one of the game’s playable protagonists, Yasuke, who is depicted in the game as an African samurai, even though there’s nothing in Japanese history to suggest that he ever rose to that rank.

In the game, Yasuke also has a suggested romantic relationship with Lady Oichi, a historical figure with ancestry to the current imperial family. At the time the game is set, Oichi is married to Shibata Katsuie, a top military general. Historically, Oichi died by his side in 1583 rather than surrendering after the Battle of Shizugtake.

The Future of Ubisoft

The deal with Tencent has been partially brokered by banks like Goldman Sachs and JP Morgan with Finexi, an independent financial advisory and consulting firm based in Paris, France, serving as an expert middleman.

This suggests that the deal between Ubisoft and Tencent wasn’t put together in haste. This is more likely something that’s been discussed for quite some time. And the poor sales performance of Assassin’s Creed: Shadows helped solidify the deal.

Ubisoft has been under pressure for a long time and other investors like AJ Investments even threatened to stage a protest outside of Ubisoft’s Paris office in May.

“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,” Guillemot said.

This suggests that Ubisoft’s current workforce of about 19,000 will be downsized further. From last year, Ubisoft cut 1,122 employees or 5.57% of its workforce.

“It’s going to happen (layoffs). This structure of the deal with Tencent makes it easier for them to do it,” Krupa said.

Although the new subsidiary will be fully owned by Ubisoft with a 25% stake held by Tencent, the minority shareholder will still have veto rights as well as certain consent rights on the disposal of the new subsidiaries important assets.