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 To overcome financial challenges, Ubisoft announced on Thursday that it plans to establish a new subsidiary focused on its flagship series like "Assassin's Creed," in collaboration with China’s leading tech company, Tencent.


 The newly formed entity, worth approximately four billion euros ($4.3 billion), will have Tencent holding a 25% stake through an injection of 1.16 billion euros as fresh capital.


 In addition to "Assassin's Creed," the division will also gather "Far Cry" and "Tom Clancy's Rainbow Six" — two of the most prominent series within Ubisoft’s collection of game franchises.


 It seems Ubisoft is capitalizing on the successful release of the newest "Assassin's Creed" installment, "Shadows," which was crucial for their upcoming plans.


 The terms of the Tencent agreement prohibit the French company from relinquishing its controlling stake in the subsidiary during the initial two-year period.


 Tencent is unable to raise its ownership stakes for the upcoming five years -- unless Ubisoft ceases to have a controlling interest during this period.


 Chief executive Yves Guillemot called the step a "new chapter in (Ubisoft's) history".


 The past year was fraught with challenges for Ubisoft, marked by multiple underwhelming launches of anticipated titles and a decline in their stock value.


 Launching the new subsidiary — whose name has not yet been revealed — by year-end will allow the company to "solidify the worth of our assets, enhance our financial position, and set the stage for these brands' sustained development and achievement in the long run," according to Guillemot.


 The deal also sees Tencent assert its hold on Ubisoft more strongly after climbing aboard in 2022.


 The Chinese company possesses nearly 10 percent of the group’s shares — a limit they cannot exceed until 2030 — whereas the founding Guillemot family retains approximately 15 percent ownership.

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 Breaking the streak
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 earlier this year, Ubisoft mentioned that they were "proactively examining several strategic and financial alternatives."


 Frederick Duquet, the finance director, stated on Thursday that they had "received numerous expressions of interest which resulted in several non-binding proposals covering various alternatives."


 Ultimately, the directors decided to establish the subsidiary because it enabled Ubisoft to retain control over its crucial resources, with the aim of developing extremely valuable brands potentially worth several billion dollars in the future, Duquet explained.


 Ubisoft intends to share additional updates regarding alterations within the organization at a future date.


 By the end of trading in Paris on Thursday, the firm’s market capitalization was valued at 1.7 billion euros, which is under half the worth of the newly formed subsidiary.


 The teams dedicated to the three primary franchises will unite within the newly established unit based in France, particularly involving Ubisoft's extensive Montreal studios which stand as one of the biggest within the company.


 Altogether, the publishing company has approximately 18,000 employees globally, with 4,000 based in France.


 Since its launch on March 20, "Assassin's Creed Shadows" has attracted three million players, marking a significant turnaround from Ubisoft’s recent string of underwhelming game releases.


 Despite this, the team will proceed with a austerity measure strategy established in early 2023. This includes shutting down facilities located outside of France as well as reducing their workforce by 2,000 employees.


 Ubisoft's difficulties mirror broader stagnation in the video game industry over the last couple of years.

Ubisoft Unveils Restructuring Plan with Billion-Euro Investment

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To overcome financial challenges, Ubisoft announced on Thursday that it plans to establish a new subsidiary focused on its flagship series like "Assassin's Creed," in collaboration with China’s lead…