Shares of Ubisoft Entertainment surged on Friday after the French video game company announced plans to create a new subsidiary that will house some of its most popular franchises.
Chinese tech giant Tencent will invest €1.16 billion ($1.25 billion) for a 25% stake in the newly formed unit, which will include the Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six brands.
The deal values the subsidiary at €4 billion, including debt, Ubisoft said in a statement.
The move is part of Ubisoft’s broader strategy to stabilize its business after a period of declining sales, game delays, and investor pressure.
With this deal, the company aims to create multi-platform game ecosystems around its best-selling franchises while focusing its core operations on new projects.
Ubisoft stock gains after prolonged struggles
Following the announcement, Ubisoft’s stock jumped 9.1% to €14.09 in European morning trade, pushing its market capitalization to around €1.8 billion.
The rally builds on gains from earlier in the week, which were fuelled by the successful launch of the latest Assassin’s Creed instalment.
Despite the recent rebound, Ubisoft’s share price remains down about 28% over the past year.
The company has faced ongoing struggles, including multiple delays of major game releases.
Assassin’s Creed Shadows, one of its most anticipated titles, has been postponed twice in the last six months.
Additionally, Ubisoft cut its earnings guidance in September, further weighing on investor confidence.
The restructuring marks a turning point for the company, which had been exploring strategic options for months.
Some investors had even called for Ubisoft to go private as it struggled to recover from underwhelming game launches and shifting industry trends.
Tencent strengthens foothold in gaming
As part of the agreement, the new subsidiary will receive an exclusive, irrevocable, and perpetual license to develop games under the Assassin’s Creed, Far Cry, and Rainbow Six brands.
Ubisoft will retain overall control and continue consolidating the subsidiary within its financial results, ensuring that it maintains a direct influence over its core franchises.
For Tencent, the deal represents another step in expanding its presence in the global gaming market.
The Chinese company, which already holds stakes in several major gaming firms, including Riot Games and Epic Games, has been seeking international growth opportunities amid increasing regulatory scrutiny in its home market.
Ubisoft co-founder and Chief Executive Yves Guillemot said the deal marks a significant moment in the company’s history, paving the way for a new phase of growth.
The company plans to share more details on its future operating structure in the coming months.
The Assassin’s Creed franchise has been one of Ubisoft’s most successful, selling over 200 million copies worldwide.
According to a company earnings report, the series generated around €4 billion in revenue over the past decade, underscoring its importance in Ubisoft’s long-term strategy.
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