A recent report suggests that Ubisoft and Tencent are exploring the possibility of starting an asset venture. This strategy could lead to Ubisoft being divided, serving as a potential alternative to Tencent providing financial support for the troubled company’s private buyout.
The years following the pandemic have been tough for Ubisoft, as the developer and publisher released several high-budget games that didn’t meet sales expectations. This series of setbacks has led to a staggering drop of over 80% in its stock price since the beginning of the 2020s. However, a potential upside for any publicly traded company in this predicament is that a lower stock price can make the option of going private more attainable and affordable. In late 2024, Ubisoft announced it was looking into “strategic options” for its future, coinciding with its share price hitting a 12-year low. Reports from that period indicated that the company was mainly considering financing options for a possible private buyout by Tencent, the Chinese entertainment giant that already holds a minority stake in Ubisoft.
According to Bloomberg, Tencent and Ubisoft are exploring a new plan, as reported by sources close to their discussions. They are considering a joint venture that would involve only a portion of Ubisoft’s assets. This arrangement would allow Tencent to increase its stake in Ubisoft, which is currently about 10%. No final decision has been reached yet, and the talks are at a stage where Tencent and the Guillemot family from Ubisoft are assessing which assets to include in the potential joint venture and their overall valuation.
Ubisoft May Not Go Private If It Gets Broken Apart
Tencent’s primary reason for considering this move appears to be enhancing Ubisoft’s value. This implies that if the idea of splitting up Ubisoft gains approval, it might eliminate the chance of the company going private altogether—a situation that becomes more probable as the stock price continues to decline.
The proposed asset venture would allow Tencent to gain greater influence over certain Ubisoft properties, while also supporting the company’s expansion of its video game business beyond its home market. This collaboration could involve some of Ubisoft’s most prized franchises, including Assassin’s Creed, which is precisely the kind of asset that would attract significant interest from a major investor like Tencent.
The last major triumph for Ubisoft was Assassin’s Creed Valhalla, released in late 2020, which raked in more than $1 billion. The next highly anticipated title in the series has already been postponed twice to ensure a smooth launch. With the most recent delay, Assassin’s Creed Shadows is now scheduled for release on March 20, giving Ubisoft 11 days to improve its financial results before the fiscal year concludes on March 31.