Ubisoft Finally Decides To Make A New Subsidiary For Their Biggest IP, 25 % Owned By Tencent

Ubisoft has finally revealed their plans to change the company.

As shared by Shinobi602 and Wario64, Ubisoft is starting a new subsidiary to be valued at €4 billion, or $4.3 billion. TenCent has agreed to invest €1.16 billion in the venture, which would represent approximately 25 % of the company.

As explained in Ubisoft’s press release, these are the details of this new arrangement:

“The new subsidiary would include the teams developing the Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry franchises based in Montréal, Quebec, Sherbrooke, Saguenay, Barcelona, and Sofia as well as the back-catalog and any new games currently under development or to be developed.

The new subsidiary would be granted by Ubisoft a worldwide, exclusive, irrevocable, perpetual license in respect of the intellectual property and similar proprietary rights owned or licensable by Ubisoft in relation to Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry in exchange for a royalty.”

This essentially confirms the rumor reported by Bloomberg’s Jason Schreier earlier this month, and this is where things get interesting. There were earlier rumors that Ubisoft already pitched to TenCent that they can buy the Guillemots out of the company, or that they start a joint venture with the Guillemots. TenCent rejected both pitches, the latter apparently because they were not guaranteed more decision-making power.

Officially, Ubisoft stated that this is the result of a strategic review, overseen by members of their board of directors that did not include the Guillemots. But if these rumors were true, than it looks like this is the deal that TenCent finally agreed to.

While the Guillemots can choose to take away the licenses for these games anytime they want, this arrangement does give TenCent more control over the enterprise. We won’t get into the technical details of the finer provisions of the deal, but among them, TenCent can’t sell their shares in the subsidiary for five years, and Ubisoft has a call option and TenCent has a put option in case there’s a change in leadership in Ubisoft itself.

We will have to see in time how this will affect Ubisoft and the video game industry. In general, a company creates a subsidiary for one of their businesses to protect that business from issues with the main company. As a smaller company, it will be easier for the subsidiary to be profitable, as it only has to worry about the performance of its own products and services.

We hope this has secured the futures of Ubisoft’s developers and dev teams around the world, and also that this will mean a brighter future for Tom Clancy’s Rainbow Six, Assassin’s Creed and Far Cry. If everything goes according to plan, they will close this deal and we’ll have a name for the new company before the end of the year.