Ubisoft, the renowned video game developer behind the “Assassin’s Creed” series, is facing a potential buyout from Chinese multimedia conglomerate Tencent and the company’s founding Guillemot family. Bloomberg News reported on Friday that the two parties are considering taking Ubisoft private among other options, following a challenging fiscal year for the company. Ubisoft’s shares surged more than 30% after the report, setting the stage for the biggest one-day jump on record.
The company’s stock had been down 54% for the year at Thursday’s close, as Ubisoft cut its guidance and postponed the release of “Assassin’s Creed Shadows” by three months. The consideration for a buyout comes amidst a string of financial and reputational challenges for Ubisoft. The company has faced criticism for its recent addiction to microtransactions and overall stagnation as a studio.
Additionally, the dismal performance of titles like “Skull & Bones” and “Star Wars Outlaws” has contributed to the company’s struggles. Activist investor AJ Investments, which holds less than a 1% stake in Ubisoft, has also been pressuring the company for changes.
Tencent considers Ubisoft buyout options
The firm claimed it had secured the support of 10% of Ubisoft’s shareholder base to push for changes, including engaging industry experts as potential replacements for the current management. AJ Investments called for Ubisoft to sell itself to private equity groups or Tencent. Tencent, one of China’s largest technology firms known for its strong market share in gaming, is already a minority shareholder of Ubisoft, owning just under 10% of the company.
The Guillemot family, Ubisoft’s founders, own 15% of the company. Industry analyst James Lockyer suggested that part of the issue for game publishers today is that gamers are dedicating more time to older games than to new titles. “More choice plus a cost-of-living squeezed wallet has meant consumers’ cash has been spread more thinly, leading to revenues and ROIs [return on investment] of those games often coming out below expectations,” said Lockyer.
As Ubisoft navigates these challenges and considers potential changes, the market will be closely watching for any further developments from Tencent, the Guillemot family, and other key stakeholders. Ubisoft declined to comment on the report when contacted by Reuters, while the Guillemot family did not respond to an emailed request for comment.
