Ubisoft Creates a Subsidiary With Help From TenCent
Ubisoft is making a Hail Mary play to save itself from collapse, and it’s not putting Assassin’s Creed Shadows on the market with a wish and a prayer. Two weeks ago, a Ubisoft employee told Bloomberg that the video game company was forming an “entity” in which it would house its biggest IPs and was searching for minority investors to foot part of the bill, with Tencent specifically mentioned. Well, it looks like that reporting was right on the money because Ubisoft just announced that it has created “a dedicated subsidiary based on its Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six brands.” And Tencent will indeed be a minority shareholder in this subsidiary, as it is in Ubisoft, by investing €1.16 billion into it, which is the equivalent of $1.252 billion, with the subsidiary receiving an Enterprise Value of c.€4 billion, or $4.32 billion, after Tencent’s investment. The goal, according to Ubisoft, is to build “game ecosystems designed to become truly evergreen and multi-platform.” As for what specific aspects of the games Ubisoft will be focusing on, the answer appears to be… everything. They run down a list that includes “solo experiences” and the accompanying narratives, multiplayer, free-to-play, social features, and “increased frequency of content releases.” Ubisoft says it will also develop Tom Clancy’s Ghost Recon and Tom Clancy’s The Division; the wording suggests these are not part of the new Ubisoft subsidiary, so of the Tom Clancy brands, I guess it’s just Rainbow Six that made it over.
When I first read the press release, I assumed the term “ecosystem” was just some nonsense corporate word designed to look smart while saying nothing, but I looked around, and they mean the various aspects of creating and selling a game. That doesn’t mean this is anything new; the Ubisoft subsidiary strikes me as more about getting more money from Tencent and other investors than doing anything revolutionary with their video game development. I assume the real point is that they’re going to focus on their big-name brands, which is smart for a company in freefall like Ubisoft. Even the other titles they’re going to develop alongside these are adjacent to Rainbow Six in that they’re all Tom Clancy creations, or at least created by his company. (It’s a little murky because Clancy passed away three years before The Division was a thing, but I don’t see his video game studio, Red Storm Entertainment, listed on any of the Division games except the canceled Heartland; it’s a moot point anyway, as Ubisoft owns Red Storm.)
What Ubisoft needs to realize – and I don’t doubt Tencent and whoever else is investing in this subsidiary have told them – is that these games need to be good, and they need to be appealing. That means no more identity politics, no more virtue signaling, and no more throwing games onto the market when they’re riddled with bugs. Ubisoft has a lot of work to do if it wants to get gamers to trust them again, and the CEO, Yves Guillemot, needs to get over himself, stop playing the victim, and stop lecturing his customers. None of that appears to be working for Assassin’s Creed Shadows, the success of which That Park Place reports is almost certainly spin, with Ubisoft touting that it has reached 2 million players while not revealing the number of units sold and failing to mention that the 1.5 million subscribers to its Ubisoft+ subscription service have automatic access to Assassin’s Creed Shadows. The game is currently at 44 on the SteamDB daily charts, and its all-time peak is more than only one of the games currently beating it and less than the five games directly under it. That doesn’t sound good, and since sales figures haven’t been released, it’s safe to assume Shadows is not lighting the gaming world on fire. (At least it’s doing better than Star Wars Outlaws, I guess.) It’ll be an interesting case study to watch what Ubisoft does with its next couple of games; if a company in as dire straits as this one refuses to shape up, I don’t think we can hold up much hope for the rest of the industry.
Let us know what you think of the Ubisoft subsidiary in the comments!
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