Finance

Ubisoft Addresses Tencent Buyout Rumors: What's Really Happening?

2024-10-07

Author: Ting

In a swift response to swirling rumors about Tencent's potential buyout of the revered French game publisher Ubisoft, the company has chosen its words carefully. On Monday, Ubisoft confirmed that it frequently evaluates strategic options to benefit its stakeholders, assuring that it will notify the market if and when any significant decisions are made.

These comments come on the heels of a report from Bloomberg, revealing that Tencent—China's gaming behemoth—alongside the Guillemot family, Ubisoft's founders, are actively seeking ways to stabilize the publisher and enhance its market value. This attempt to bolster Ubisoft's standing is particularly crucial given that the company's stock plummeted by 19 percent last month after announcements of delayed releases, including the highly anticipated "Assassin's Creed Shadows," coupled with disappointing sales figures for "Star Wars Outlaws."

One of the avenues reportedly being explored by Ubisoft is the prospect of going private. Currently, Tencent holds a roughly 10 percent stake in Ubisoft and controls nearly 50 percent of Guillemot Brothers Ltd., reinforcing its significant influence over the company's strategic direction.

Adding to the context, Ubisoft has been navigating a turbulent year. Aside from the stock drop, the company has faced turmoil in its workforce, having laid off numerous employees from its IT division and special effects studio in late 2022, followed by a revamp of its subscription service earlier this year. This restructuring suggests that Ubisoft is keen to reassess its operational strategy, particularly with a continued focus on open-world and live-service games that resonate strongly in today's gaming landscape.

In the ever-evolving world of video gaming, where acquisitions can shift the balance of power overnight, the eyes of the gaming community—and investors—will be keenly watching Ubisoft's next moves. Will the company align itself more closely with Tencent, or will it carve a path toward independence? Stay tuned as this situation develops!