Ubisoft has announced a major change to its organization as it looks to the future, as the company has created a new “dedicated subsidiary” focused on three main franchises: Assassin’s Creed, Far Cry, and Rainbow Six. Tencent is investing €1.16 billion ($1.25 billion USD) to take a minority stake (about 25%) in this new subsidiary.
Ubisoft said the parts of its business that are not included in this new entity, including The Division and Ghost Recon, along with development of certain new IP, will continue in parallel. However, it’s unknown to what extent these changes could result in potential layoffs or studio closures.
“This new subsidiary will focus on building game ecosystems designed to become truly evergreen and multi-platform. Backed by greater investment and boosted creative capacities, it 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,” Ubisoft said.
Tencent emerged as the winner following a “competitive process” under which Ubisoft considered different “strategic options.” It was previously reported that Microsoft and EA were in the mix in some capacity.
Alongside the announcement of this new business entity, Ubisoft said it will “focus on nurturing” some of its other franchises, including Ghost Recon and The Division, while also continuing to make new IP and building out its game engine technologies and online services. Ubisoft said it will share more information “at a later stage.”
Ubisoft co-founder and CEO Yves Guillemot said this marks a “new chapter” in Ubisoft’s history, calling this a “foundational step in changing Ubisoft’s operating model.”
“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,” Guillemot said.
Tencent president Martin Lau said, “We see the immense potential for these franchises to evolve into long-term evergreen game platforms and create engaging new experiences for gamers.”
In terms of further specifics, the new subsidiary includes the development teams working on Rainbow Six, Assassin’s Creed, and Far Cry in Montreal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia. Ubisoft said it also includes any new games in those places under development currently or that are made in the future, along with back catalog titles from those teams. This new subsidiary is getting rights to the Rainbow Six, Assassin’s Creed, and Far Cry franchises in exchange for an unspecified royalty payment.
It’s been a tumultuous past year for Ubisoft even prior to this, as the company’s cost-cutting efforts have included mass layoffs and studio closures, as well as the shutdown of XDefiant.
Ubisoft’s latest big release was Assassin’s Creed Shadows, which debuted on March 20, quickly reaching 3 million players and collecting strong reviews from critics.