Tencent Buying More From Ubisoft – Just the Partnership the French Need?

Recognized the signs of the times it seems. No, Ubisoft has not (yet?) been sold, but the fact that Tencent is significantly expanding its stake marks an important point in history. Founded in 1986, the Guillemot family has always been the linchpin of Ubisoft. Those who finally said where to go – together with the shareholders, yes, that was also part of it since the IPO in 1996, when Ubi Soft then became Ubisoft.

In 2004, for example, EA bought a 20 percent stake in Ubisoft. At the time, it was considered a hostile takeover within Ubisoft and the fear was great. But not much happened, EA sold its shares again in 2010. Not with too much profit, as this was the time when the price started to oscillate back after the initial Assassin’s Creed highs. Only then, from 2013 to 2018, did the stock explode. Assassins, Prince of Persia, Just Dance, Rayman, Rabbids, Watch Dogs, Far Cry, Tom Clancy and a lot of little stuff that you like to forget, but that also works – Monopoly, Trivial Pursuit, occasionally a 3DS or mobile game – there nothing could go wrong. In 2016 it got exciting and expensive again. Vivendi might want Ubisoft, but Ubi didn’t want Vivendi. Vivendi bought a lot of shares, nearly the 30 percent stake needed to launch an acquisition, but then nothing happened.

So now Tencent, who are stalking the 12 percent after the Guillemots once again sold properly, with options for up to 18 percent. Everything is a bit nested via detours, but in the end something like this. So everything like 2004 or 2016? Well, yes. It has to be said that after all these years, Ubisoft only has two established brands that are at the top. One of them Just Dance, the second largest Ubi franchise after Assassin’s Creed. Exactly how much Just Dance sells is, as always, a little hard to pinpoint, but it’s probably around 10 million, maybe a bit more per title. These are good and above all reliable figures. But then again, Ubisoft has over 20,000 employees and umpteen studios. And more and more, it feels like Assassin’s Creed and Just Dance have to pay all the rent on their own. All of the other franchises aren’t unsuccessful or unpopular, but they’re small bastards that do just enough crap to continue to exist in their current form.

So where to? More Assassin’s Creed? It doesn’t work, you’ve already tried it, it works for a multiplayer-based game like Call of Duty, but at some point nobody wanted annual assassins anymore. mobile gaming? Now we come to Tencent. Ubisoft was early on with mobile games, starting in 2010 on iOS and from 13 on Android. Number of long-term resounding games that have been skilfully monetized over a relevant period of time? More or less zero. And that despite all the franchise power from Assassin’s Creed to Rayman. Or MMOs of all kinds. Ubisoft doesn’t have one, Tencent does practically nothing else. Ubisoft has at best a shop with its own launcher, while Tencent has a platform with WeGame whose 200 million+ users make Steam look pretty small. Tencent can do a lot of things that Ubisoft hasn’t been able to do before. But Ubisoft has the brand names of the franchises that everyone in the West knows, but they just don’t work in the classic way for the masses the way they should be today.

Personally, I believe less in a takeover preparation, but in a kind of strategic partnership. Ubisoft contributes creativity and brands, Tencent its know-how on how to turn these into large international mobile franchises, including the platform and users. Does that mean Beyond Good & Evil 2 is now being scrapped to produce a Rabbids gatcha game? May be. It may also be that this gatcha game will save BG&E 2 and give Ubisoft more financial freedom for such projects. And why is there no Far Cry Battle Royal at all? The franchise has enough characters and maps for three of them. Tencent knows how to make a game like this. Can be very rewarding for both sides and for us too, because I can well imagine a good Far Cry Battle Royale.

Ubisoft has been almost sold and bought a few times, each time causing concern. This time Ubisoft is at a critical point and the world situation with looming recession and high energy costs does not make life easier. They’re too big to just scurry around and see if Watch Dogs 4 is going to be anything. But they aren’t big enough, their franchises, with a few exceptions, not reliable enough to compete at the top and still have some breathing room. A partner like Tencent can cover exactly the blind spots that Ubisoft seemed to spot from time to time, but never really got a grip on itself. This development can be an important milestone for Ubisoft. Or in a few years, Tencent will sell its shares again, everything will continue and history will repeat itself.