Tencent Makes A $297 Million Investment In Ubisoft

Tencent has invested $297 million into Assassin’s Creed developer Ubisoft. Guillemot Brothers Limited is the firm that Ubisoft’s founders have used to oversee the larger Ubisoft corporation.

On Tuesday, Ubisoft revealed that Tencent had bought a minority position in Guillemot Brothers Limited. CEO and co-founder Yves Guillemot has stated that the purpose of Tencent’s expanded ownership in Ubisoft is to protect the company’s future worth.

Tencent Ubisoft
Tencent Ubisoft

According to Martin Lau, president of Tencent, both firms’ positions in the mobile gaming sector will be boosted by this alliance. “We are excited to expand our engagement with the Guillemot family’s founders, as Ubisoft continues to develop immersive game experiences and to bring some of Ubisoft’s most well-known AAA franchises to mobile,” Lau said in a news release.

It’s consistent with our belief that innovative startups are led to success by their founders, and with this agreement, we’ll be able to back those entrepreneurs formally.

The Chinese corporation put 200 million euros into Ubisoft, 100 million euros as capital, and the rest as shares. Adding to their approximately $300 million investment in Guillemot Brothers Limited, Tencent now owns 49.9% of the company’s economic stake and 5% of its voting rights.

The transaction will not result in a change in the company’s leadership since the Guillemot family will retain complete control of Guillemot Brothers Limited, and Tencent will not be given a voting position on the board of directors.

Tencent has been granted permission by Ubisoft’s board of directors to increase its direct stake in the company from 4.5 percent to 9.99 percent of capital and voting rights, with the caveats that Tencent will not be allowed to split sales with Ubisoft for five years and will be limited to a 9.99 percent stake for the next eight years.

Shenzhen-based Through its ownership of “League of Legends” developer Riot Games, its 40% ownership of “Fortnite” developer Epic Games, and its investments in dozens of other studios, Tencent has become one of the largest and most powerful video gaming corporations in the world.

Tencent bought 16.25% of FromSoftware, the Japanese studio responsible for the Elder Scrolls: Knights of the Frozen Throne and the Dark Souls games, a week before Ubisoft made their announcement.

According to a memo to Ubisoft staff that was shared with The Post, Guillemot reassured employees on Tuesday that Tencent’s increasing ownership in Ubisoft would not affect how the firm is handled.

In addition, “it is vital to underline that this agreement will not affect our governance,” Guillemot emphasized in the memo. Tencent will not be participating in the day-to-day operations or making choices for either Ubisoft or Guillemot Brothers.

Tencent is well-liked in the video game industry for being a helpful shareholder, as it provides similar backing to numerous other successful studios. Ubisoft’s continued success will depend on our team’s ability to come together and maintain a laser-like focus on our goals and the many chances we have.

Guillemot said that Tencent’s increased stake in Ubisoft would bolster the company’s efforts to grow abroad “while preserving our identity and values.”

Ubisoft has had a rough go of it over the past few years. Workers at Ubisoft in 2020 joined the #MeToo movement in the game industry to speak out against sexual harassment and assault.

In a July 2020 internal message to staff, Guillemot promised to implement procedures to protect employees. However, Ubisoft employees claim to have seen little progress in this regard in the ensuing months.

For the first time in the company’s 23-year existence, Tencent saw a decline in sales in August, reporting a 3% decline in total revenue and a 1% decline in gaming revenue, for a total of $19.78 billion.

As a result of tightening regulations in China, the country’s tech behemoth has been looking outside for growth.