Ubisoft's NFT and blockchain games fail? They split their three major Assassin's Creed IPs into subsidiaries, with Tencent investing $1.25 billion.

(120BTC.COm) News: Ubisoft, a major Canadian game manufacturer, announced the establishment of three new subsidiaries dedicated to "Assassin's Creed", "Arctic Warcry" and "Rainbow Six" today (28). The aim is to obtain a huge investment of 1.16 billion euros from Tencent. It also marked the transformation of the business model of Western triple-A masterpieces represented by Ubisoft, and the new company was valued at 4 billion euros.

Previously, Ubisoft faced negative reviews from traditional players due to poor game releases and its promotion of DEI and NFT, as well as blockchain games, resulting in a nearly 80% drop in stock price from early 2021 to now. However, upon the news of Tencent investing in a new subsidiary, Ubisoft's stock rose by 12%.

Play people for suckers the three major IPs to the new company

According to an official press release from Ubisoft, the new subsidiary will be fully responsible for the existing games, subsequent development, and future new titles of the three major brands: "Assassin's Creed," "Far Cry," and "Rainbow Six." This means that a large number of personnel from Ubisoft's flagship studios, including "Montreal," Quebec, as well as Barcelona and Sofia's core development teams and studios, will be integrated into the new company. Ubisoft will grant the subsidiary a global, exclusive, and permanent intellectual property license.

Since the launch of the Assassin's Creed series in 2007, it has sold over 200 million copies worldwide; Rainbow Six: Siege boasts over 90 million registered players, firmly establishing its position in the multiplayer competitive gaming market; Far Cry attracts millions of fans with its open-world gameplay. These three major brands contribute about 60% of Ubisoft's annual revenue, making them the "golden geese".

New Company: Focus on Multi-Platform and Social

The new subsidiary has a clear goal of building a "sustainable and multi-platform" gaming ecosystem through three major IPs. This specifically includes improving the quality of single-player storytelling, increasing the update frequency of multiplayer games, reducing the risks of buyout systems, introducing free-to-play models, and strengthening social interactions. Ubisoft CEO Yves Guillemot stated that this is key to the company's transformation, and we hope these brands continue to be a part of players' lives.

Recently, "Rainbow Six: Siege" has also launched new season passes and continuous updates, successfully extending the product lifecycle. The new subsidiary clearly plans to promote this model to two other major brands, and "Assassin's Creed: Shadows" has also achieved greater success than expected.

Tencent acquires 25%, has control

According to the content, Tencent acquired a 25% stake in the new subsidiary for 1.16 billion euros. The structure shows that Tencent enjoys minority shareholder protection veto rights and consent rights for major asset disposals. Although it does not dominate operations, it still holds a certain degree of influence. Ubisoft, on the other hand, retains complete control over the subsidiary and expects to significantly reduce the parent company's debt pressure through this funding.

In the fiscal year 2024, Ubisoft's net debt reached 1.5 billion euros, and its stock value has significantly dropped to only 10% of what it was three years ago. This capital injection is a great relief for Ubisoft in terms of liquidity and some financial ratios, which is beneficial for the entire Ubisoft company in the medium to short term.

The transaction is expected to be completed by the end of 2025, but during this period, Ubisoft continues to incur a massive amount of game development expenses that are consuming funds, and it still needs to demonstrate more transformation results to solidify market confidence.

Ubisoft Leaves Controversial IP, Continues to Develop NFT Blockchain Games?

In addition to the new subsidiary focusing on three major brands, Ubisoft also announced other IPs such as "Ghost Recon" and "The Division", and accelerated the development of new IPs and cutting-edge technologies. CEO Guillemot emphasized: "We will unleash the creativity of our teams to create games that exceed players' expectations."

However, many failed projects in the past are still led by the parent company in the future, such as the failures of works like "Battle for the Atlantic," "XDefiant," and "Star Wars: Outlaws," which are among the many reasons for Ubisoft's stock price decline. The outside world still has doubts about its IP strategy and operational policies.

Now that Ubisoft's parent company, Golden Goose, is no longer around, the remaining game teams can only develop controversial and failed IPs. It is not difficult to see that this is a play people for suckers of game development groups from risky and stable IPs, possibly a precursor to show significant improvements.

But in the past, Ubisoft was not a company lacking in innovation; it could even be said to be at the forefront of game innovation. Titles like "Tom Clancy's Ghost Recon: Breakpoint" and "XDefiant" have invested significant effort in NFT platforms and virtual item trading with players, but ultimately failed to gain the trust of core players.

With the rise and stable operation of other NFT games, gaming experts believe that UBISOFT may be transitioning its game IP to blockchain games as preparation. Although mainstream players have not yet accepted innovative applications of blockchain, the trial and error costs in this era of blockchain games are already different from before. With the popularization of wallet and public chain construction, the cost of deploying game chains is significantly decreasing, and UBISOFT, which has raised a large amount of money, may launch a new generation of blockchain service-oriented games within three to five years.