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Tencent invests $297 million into Ubisoft

(Ubisoft/Washington Post illustration)

Tencent has made a $297 million investment into Assassin’s Creed maker Ubisoft. Ubisoft announced Tuesday that Tencent acquired a minority stake in Guillemot Brothers Limited, the company through which Ubisoft’s founders have managed the greater Ubisoft corporation. Ubisoft CEO and co-founder Yves Guillemot said Tencent’s increased stake was done to secure Ubisoft’s value for the future. Martin Lau, president of Tencent, said this strengthened partnership will also bolster both companies’ footprint in the mobile gaming market.

“We are excited to expand our engagement with the founders, the Guillemot family, as Ubisoft continues to develop immersive game experiences, and to bring some of Ubisoft’s most well-known AAA franchises to mobile,” Lau said in a news release. “This agreement also aligns with our philosophy to invest alongside creative founders with full confidence that they will lead their companies to new heights.”

The Chinese conglomerate’s investment into Ubisoft included 200 million euros in shares and 100 million euros in capital. For a total of nearly $300 million, Tencent has also secured a 49.9 percent economic stake and 5 percent voting rights in Guillemot Brothers Limited.

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This deal will not result in a change in leadership: The Guillemot family continues to have exclusive control over Guillemot Brothers Limited and Tencent will not gain a seat on the company’s board of directors. At the same time, Ubisoft’s board of directors has approved Tencent to increase its direct stake in Ubisoft from 4.5 percent to 9.99 percent of capital and voting rights, with the condition that Tencent cannot share its sales for five years and cannot increase its stake beyond 9.99 percent for eight years.

Shenzhen-based Tencent is one of the largest and most powerful video game company in the world via its ownership of “League of Legends” creator Riot Games, 40-percent ownership of “Fortnite” creator Epic Games and investments in dozens of other studios. A week before the Ubisoft announcement, Tencent acquired a 16.25 percent stake in FromSoftware, the award-winning Japanese developer of “Elden Ring” and the Dark Souls series.

Guillemot assured his employees Tuesday that Tencent’s increased stake in Ubisoft would not influence how the company is run, according to an internal memo to Ubisoft workers shared with The Post.

“Furthermore, it’s important to note that this agreement will not impact our governance,” Guillemot wrote in the memo. “Tencent is not taking a seat on the board of directors of Ubisoft nor Guillemot Brothers, nor becoming involved in our decisions or day to day operations. Tencent has a reputation as a constructive shareholder that already supports many other leading video game creators in the same way. Our strategy and creative choices remain our own, and Ubisoft’s success continues to depend on all of us joining together to focus on our objectives and the many opportunities in front of us.”

Guillemot went on to say that Tencent’s increased stake into Ubisoft would bolster the company’s efforts to grow abroad “while preserving our identity and values.”

The past few years have been tumultuous for Ubisoft. In 2020, Ubisoft was embroiled in the gaming industry’s #MeToo movement as workers within the company shared stories of sexual harassment and misconduct. Guillemot vowed to implement safeguards to protect employees moving forward in an internal memo for employees sent in July 2020, but months later, Ubisoft workers reportedly saw few changes.

In August, the Tencent reported its first dip in revenue in its 23-year history — a 3 percent drop overall and 1 percent drop in gaming revenue, to a total of $19.78 billion. The Chinese tech giant has also been facing harsher restrictions in its home market, prompting it to seek out more opportunities abroad.

Annabelle Timsit contributed to this report.

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