Tencent-Ubisoft: Splinter sell

Mired in difficulty in recent years, in March, Ubisoft announced it had created a new games studio alongside Tencent, which already owns 9.99% of Ubisoft’s capital, with the Chinese conglomerate adding $1.3 billion to acquire a quarter share in Vantage Studios. The new subsidiary brings together the three best-sellers of the venerable French software house created in 1986: Far Cry, Assassin’s Creed and Rainbow Six.

The cost of developing a AAA videogame now rivals the budget of a Hollywood blockbuster, and just like the big Hollywood studios before it, Ubisoft has looked to Tencent to help shoulder the burden. The proceeds from this transaction will go towards reducing Ubisoft’s debt levels and support its investments across the group, while providing enhanced financial muscle to carry out its planned strategic transformation.  

Reacting to the Vantage Studios deal Martin Lau, the president of the Shenzhen-headquartered media and entertainment giant, remarked, “Tencent is delighted to be building on our strong relationship with Ubisoft through this investment. With its capable team and world-class creative vision, we look forward to Vantage Studios accelerating the growth of Assassin's Creed, Far Cry and Rainbow Six as evergreen platforms providing entertainment and inspiration to generations of players.”

To maintain control over the shareholding in the short term, the Chinese company will not be allowed to increase its stake in the new venture for five years. The transaction values Vantage Studios at $4.4 billion – which is higher than the value of its parent company, whose share price opened up 9.18% on March 28th (the day after the agreement was announced), before falling again in the afternoon by 11.54%.

Power up
Bringing in Tencent and ring-fencing its cash-cow franchises is the latest strategy by the Paris headquartered company to revive its fortunes, after its share price plummeted 84% between 2021 and 2025. Speaking about the Tencent deal to French business daily Les Echos, Ubisoft’s cofounder and CEO, Yves Guillemot, said the priority going forward would be to consolidate the results of its flagship titles, strengthen the licenses that remain within Ubisoft and reduce its group’s debt – ambitious goals for the company, which celebrates its 40th birthday in 2026.  

The cost of developing a AAA videogame now rivals the budget of a Hollywood blockbuster

For several years now, the studio behind Rayman and Tom Clancy’s Splinter Cell seems to have lost the magic touch that once made it so successful. The commercial failure of the Xdefiant, Skull and Bones and Star Wars Outlaws franchises forced the group to trim its workforce. To cope declining sales between 2022 and 2024, Ubisoft shaved 10% off its payroll, dropping from around 20,000 employees to 18,000 in the process.

Arguably the biggest blow came in from the lukewarm response to the highly anticipated Star Wars Outlaws in August 2024, which saw Ubisoft’s share price hit a 10-year low in the weeks following its launch. A lot, then, was riding on the oft-delayed release of the latest installment in the Assassin’s Creed franchise, Shadows, in March 2025.

Initial signs looked promising as the game recorded one million downloads in its first 24 hours, however despite positive reviews from the gaming press sites, it could not maintain this momentum, failing to crack the top 20 best-selling games in the US for the period January 1st to November 1st 2025, as reported by GameStop.  Undeterred, in December Ubisoft released a Nintendo Switch 2 version of the game. Intriguingly, the company is rumored to be working on a remake Assassin’s Creed 4: Black Flag, which many believe to be the best entry in the series to date.

Tencent some the richer
Having cut its teeth on mobile games over the past decade and a half, the holy grail for China’s home-grown games industry now is to have a breakout AAA hit on consoles, and from there to grab a bigger slice of the console gaming pie from Japan, the US and Europe. In 2024, the action-RPG title Black Myth: Wukong by Chinese studio Game Science, did good business on PC and PS5 – not just in China but across the globe. This success could herald the arrival of China as a major force in high-end games. By acquiring a significant stake in one the world’s largest and most high-profile game studios, Tencent ensures it doesn’t lose ground on its local rival by having to build a AAA development team from scratch.

Tencent wasn’t the only one investing in a prominent video-game publisher this past year. In September, Electronic Arts, makers of Madden and The Sims, was acquired by a consortium headed by Saudi Arabia’s Public Investment Fund for $55 billion.