Tensent invested $297 million in Ubisoft. Guillemot Brothers Limited is the firm that Ubisoft’s founders used to oversee the larger Ubisoft corporation.
Ubisoft said Tuesday that Tencent had bought a minority position in Guillemot Brothers Limited. CEO and co-founder Yves Guillemot said the purpose of Tencent’s expanded ownership in Ubisoft was to protect the company’s future value.
Tencent Ubisoft.
According to Martin Lau, president of Tencent, the alliance will strengthen both companies’ position in the mobile gaming sector. “We are excited to expand our partnership with the founders of the Guillemot family as Ubisoft continues to develop exciting gaming experiences and bring some of the best-known AAA franchises to mobile,” Lau said in a press release.
This aligns with our belief that innovative startups lead to the success of their founders, and with this agreement we will be able to officially support these entrepreneurs.
The Chinese corporation has invested 200 million euros in Ubisoft, 100 million euros in equity and the rest in shares. In addition to its investment in Guillemot Brothers Limited of about $300 million, Tencent now owns 49.9% of the company’s economic stake and 5% of voting rights.
The deal will not result in a change in the company’s management, as the Guillaume family will retain full control of Guillemot Brothers Limited, and Tencent will not have voting rights on the board of directors.
Tencent received permission from the Ubisoft board to increase its direct stake in the company from 4.5 percent to 9.99 percent of the capital and voting rights, with the caveat that Tencent will not be allowed to share sales with Ubisoft for five years and will be limited to a 9.99 percent stake for the next eight years.
Through its ownership of “League of Legends” developer Riot Games, its 40 percent ownership of “Fortnite” developer Epic Games and its investments in dozens of other studios, Tencent has become one of the largest and most powerful video game corporations in the world.
Tencent bought 16.25 percent of FromSoftware, the Japanese studio responsible for Elder Scrolls: Knights of the Frozen Throne and The Dark Souls.
According to a memo to Ubisoft employees shared with The Post, Guillaume assured employees Tuesday that Tencent’s increased ownership in Ubisoft would not affect the way the firm operates.
In addition, “it is vital to emphasize that this agreement will not affect our management,” Guillemot stressed in the memorandum. Tencent will not be involved in the day-to-day operations of Ubisoft or Guillemot Brothers.
Tencent is very popular in the computer games industry for being a useful shareholder, as it provides similar support to many other successful studios. Ubisoft’s continued success will depend on our team’s ability to come together and keep a laser focus on our goals and the many chances we have.
Guillemot said that increasing Tensent’s stake in Ubisoft would support the company’s efforts to grow overseas, “while maintaining our identity and values.”
Ubisoft has had problems in the past few years. Ubisoft employees joined the game industry’s #MeToo movement in 2020 to speak out against sexual harassment and assault.
In July 2020, Guillaume promised to introduce procedures to protect employees. However, Ubisoft employees say there has been little progress in the months that followed.
For the first time in the company’s 23-year existence, Tencent saw a drop in sales in August, reporting a 3% drop in total revenue and a 1% drop in gaming revenue, for a total of $19.78 billion.
As a result of tighter regulations in China, the country’s tech behemoth is looking outside for growth.
