Ubisoft Entertainment, the renowned French video game maker behind popular franchises like Assassin’s Creed and Far Cry, is reportedly considering a potential buyout as its founders, the Guillemot family, and Chinese tech giant Tencent Holdings explore ways to stabilize and bolster the company’s value. The news, reported by Bloomberg on Friday, has sent Ubisoft’s shares soaring nearly 30%, marking a major development for the gaming industry.
Discussions to Take Ubisoft Private
According to sources familiar with the matter, Tencent and the Guillemot family, which co-founded and still manages Ubisoft, have been consulting with financial advisers to evaluate various options to enhance the company’s position. One option under serious consideration is taking Ubisoft private. The company has faced significant financial challenges in recent years, with its market value halved in 2024 as its recent game releases failed to meet expectations.
At Thursday’s market close, Ubisoft had a market value of approximately €1.39 billion ($1.52 billion). Following the news of a potential buyout, its shares surged, highlighting investor optimism about a possible turnaround for the struggling video game company.
Neither Tencent, the Guillemot family, nor Ubisoft have officially commented on these buyout discussions. Ubisoft, however, did decline to provide any immediate response to media inquiries, and representatives for Tencent and the Guillemots were similarly silent on the matter.
Ubisoft’s Struggles in 2024
Despite its longstanding reputation as one of the premier video game developers in the world, Ubisoft has had a tumultuous year. Its share value has dropped by more than 50%, outpacing the declines of some of its major competitors. The company’s struggles can largely be attributed to a series of underwhelming game releases, most notably delays and lower-than-expected sales from its Assassin’s Creed series and other major titles.
In September, Ubisoft pushed back the release of Assassin’s Creed Shadows, one of its most anticipated games, by three months. The delay came as a disappointment to both fans and investors, further undermining the company’s short-term prospects. Additionally, Ubisoft lowered its net bookings guidance, signaling that the financial performance of its upcoming releases may not meet prior forecasts.
Ubisoft’s management has been under pressure for months, particularly as its performance has lagged behind that of its rivals. In addition to its game delays, the company has struggled to adapt to the fast-evolving gaming landscape, including the rise of live-service games, mobile gaming, and the growing competition from both traditional game publishers and new players entering the market.
Potential Outcomes for the Buyout
While the option to take Ubisoft private appears to be the most prominent proposal on the table, other potential paths for the company are also being explored. According to a Reuters report from last week, AJ Investments, a Slovakia-based investment group, has garnered support from 10% of Ubisoft’s shareholders in a bid to either take the company private, sell it to a third party, or make changes to its upper management.
The Guillemot family, which owns 15% of Ubisoft’s shares, and Tencent, which holds just under 10%, are believed to be pivotal players in shaping the company’s future. Tencent, China’s largest gaming company, has increasingly expanded its global footprint in recent years, and deepening its partnership with Ubisoft could strengthen its influence in the Western gaming market.
For Ubisoft, being taken private could offer it the time and space to restructure without the constant pressure of public markets. It would also give its leadership the opportunity to focus on long-term strategies to turn around its fortunes.
Conclusion
As Ubisoft grapples with declining share value and underperformance in the gaming industry, its founders and key shareholders are actively exploring solutions to stabilize the company. The possibility of a buyout, with the potential to take the company private, has injected new hope into the company’s outlook. However, significant challenges remain, and the future of Ubisoft—once a pioneer in the gaming world—now rests in the hands of its largest shareholders, including the Guillemot family and Tencent.
