After the announcement of a new capital agreement with Tencent, Ubisoft returned Thursday, September 8 to its industrial vision for the next few years, which will be based on this new honeymoon between the French publisher and the Chinese giant.
Ubisoft is entering a new phase in its partnership with Tencent, which is taking a minority stake in the family holding Guillemot Brothers Limited, which today controls 12.8% of the capital of the French group. Tencent is investing a total of 300 million dollars in this project: 200 million in the purchase of shares and 100 million in a capital increase. This operation allows the Chinese firm to seize 49.9% of the capital and 5% of the voting rights of Guillemot Brothers Limited and – important nuance – not of the publisher of Assassin’s Creed. Together, Tencent and the Guillemot family now hold 19.8% of the capital and 24.9% of the voting rights of Ubisoft.
“For the Guillemot family, it’s a dream dealexplains Charles-Louis Planade, video game analyst at TP-ICAP. It’s just exceptional. They sold a significant part of their shares at double the price, while retaining control of the company”.
This announcement comes at a time of strong concentration in the gaming industry. Ubisoft has recently been on the list of prime targets after the takeover of Activision by Microsoft, Quantic Dream by NetEase Game, Zynga by Take-Two, and with the recent rumors of a takeover of Electronic Arts by Amazon…
For Charles-Louis Planade, this deal will have a real impact for Tencent. “It’s a way to secure target number one in the sector. With a Tencent which strengthens its position, it is difficult to see who could now pass over it. The speculative bubble collapses on Ubisoft. There will be no bidding”, even if the founding family says it is open to any proposal.
Facing the challenges of tomorrow
Following this announcement, Ubisoft decided to change its industrial vision at a time when the video game industry is changing dimension and entering an acceleration phase. As Yves Guillemot, the co-founder and boss of Ubisoft, recalled, “gaming is the fastest growing segment in the entertainment industry. The market is estimated at $200 billion this year and is expected to reach $300 billion by 2030”. The video game has become totally mainstream and that means reviewing its model.
Gaming is indeed becoming more and more democratized, multiplying on all platforms and adopting different economic models, according to Yves Guillemot who sees in it the “ultimate form of social, creative and innovative entertainment”.
And in this rapidly changing universe, Ubisoft believes in its star. in particular thanks to the power of its brands and their ecosystem. The publisher relies in particular on the strength of Assassin’s Creed, Far Cry, and Rainbow Six. These last three generated 300 million euros for each of them in the previous fiscal year. Assassin’s Creed Valhalla has generated a total of 1 billion in revenue and the idea is to reach 2 billion in annual revenue with these three brands within 5 years, specifies the CEO. To do this, Ubisoft wants to make them shine on all platforms and on ever more media, with a big focus on mobile, a platform that has never been the strength of the group.
3 mobile games in partnership with Netflix
Ubisoft thus announced on Saturday the creation of 3 mobile video games in partnership with Netflix for its platforms, including one based on the Assassin’s Creed brand, a deal with the American giant of SVOD which is added to that relating to the development of a series announced in 2020. Just Dance will also be available on mobile, as well as The Division: Resurgence.
Ubisoft is also counting on the creation of new brands, on its technologies developed in-house such as its Anvil and Snowdrop game engines or even by relying on its Ubisoft+ and Ubisoft Connect ecosystems.
Assassin’s Creed pilot fish
If there is a franchise that counts in the French universe, it is Assassin’s Creed which celebrates its 15th anniversary this year. It can actually rely on its history of 13 main games, and sales that have exceeded 200 million units since its first opus in 2007. But by pulling the rope too much, the model ran out of steam, pushing the publisher to take a break in 2016. A new breath was given with Assassin’s Creed Origins, considered a “rebirth” by Marc-Alexis Coté, the brand’s executive producer. The new opus planned for 2023, Mirage is part of this dynamic. The brand acts as a pilot fish and a symbol in the new organization put in place. It is based in particular on Infinity, a hub giving access to all experiences related to the franchise. “It’s a new approach for our teams building the games and it will impact how our fans interact with it.”. Ubisoft took the opportunity to announce three new games: Codename Red (next flagship title of the franchise, RPG in the world
open), Codename Hexe and Codename Invictus (seals the return of multiplayer). They will be available through this hub. Last but not Least, a mobile version is planned with an open-world, free-to-play game called Codename Jade. All teams around the world will now be able to participate in the development of the games. The idea is to increase bridges and pool skills.
Ubisoft thus hopes to lock its destiny for the next few years both with Tencent and with its new organization supposed to meet the new requirements of players who are increasingly solicited by the many platforms. The publisher thus leaves the prism of predators for the moment. But “the shopping is not over, far from itwarns Charles-Louis Planade. There is a scarcity in supply and production capacity“Other intermediary players such as the French Focus Interactive or Don’tNod Entertainment could become new targets for giants eager for fresh content to feed themselves in the coming years.