French video game developer Ubisoft Entertainment SA wants to create a separate entity that incorporates some of its most valuable intellectual property, including the Assassin’s Creed franchise, according to Bloomberg.
The publisher is reportedly seeking investors for a minority stake in the venture, with Chinese technology conglomerate Tencent Holdings Ltd. and several global and French-based funds among the potential bidders, sources familiar with the matter said.
The company has opened its tab for preliminary bids, with proposals expected as early as this month, the sources said. Discussions are still ongoing, but Ubisoft may seek a valuation for the new entity that exceeds its own current market value of about $1.79 billion, as of March 14.
Ubisoft has declined to comment directly to any news publication on the stake sales, but referred inquiries to its recent quarterly earnings statement, which talked about “various transformational strategic and capitalistic options” to maximize the value of its assets and franchises.
Tencent, which was linked to discussions regarding Ubisoft’s future towards the start of Q4 2024, also declined to speak about their interest in the Guillemot family’s business.
These latest investment talks come against the backdrop of Ubisoft’s financial struggles. The company’s stock has dropped for four consecutive years, with a 32% decline recorded in the last year.
Still, Ubisoft reported total sales of $936 million for the October-December quarter, a 41 % uptick from the previous quarter, and also its best performing period of the year.
In response to financial pressures, the company has initiated cost-cutting measures, including the cancelation of its shooter game XDefiant and the closure of three production studios.
Ubisoft remains focused on its flagship Assassin’s Creed franchise, with the controversial title Assassin’s Creed Shadows set to launch on March 20. The company has stated that pre-orders for the game are “performing solidly.”
Outrage out, more outrage in
On Tuesday, one of Ubisoft’s shareholders, AJ Investments, accused the game publisher of “horribly mismanaging” its business, which has resulted in declining shareholder value.
According to several sources, the firm’s CEO Juraj Krupa is reportedly planning to hold a public protest against the gaming publisher’s management, resonating his public outcry to repeated delays of Assassin’s Creed Shadows, stock devaluation, and unconfirmed reports of acquisition talks.
In a statement shared with IGN, Krupa claimed Ubisoft is not transparent about reports that it had engaged in acquisition discussions with Microsoft and Electronic Arts (EA) without informing shareholders.
“Management postponed its current game Assassin’s Creed for the first time on 18th of July 2024,” Krupa’s statement reads, “Ubisoft confirmed full-year guidance for the year and release of AC Shadows on November 15, 2024. Just a couple months later, in September 2024, Ubisoft delayed the game again and revised its guidance, which in our view, was a move Ubisoft’s management could have predicted.”
Ubisoft argues the delays were necessary to improve the game’s quality, but Krupa believes it is an unnecessary move that caused “severe stock declines.”
AC Shadows sales could come in low, especially in Asia, where gamers bashed the developers for claiming the upcoming title is inspired by “real life events” in medieval Japan, yet it included protagonist African-born Yasuke as a samurai.
Even though Yasuke is part of Japan’s history as an honorary Oda clan member, several historians have refuted the claims that he attained the “samurai class status.”
AJ Investments has scheduled a demonstration for May to pressure Ubisoft into taking corrective action. The shareholders have stated that if the publisher agrees to focus on improving its stock value, it will call off the protest.
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