Chinese gaming giant invests heavily in Western developers

Tencent announced a $450m AUD investment into Guillemot Bros, the parent company of Ubisoft. Tencent will not be granted board seats or ownership.

Chinese company Tencent, a leader in gaming, has reportedly invested nearly $450 million AUD into Ubisoft’s controlling company Guillemot Bros. Ubisoft is the company behind the Assassin’s Creed series, and while this is a hefty sum, this does not mean Tencent is acquiring Ubisoft.

First reported by Axios Gaming reporter Stephen Totilo, Tencent’s investment grants it a 49.9% stake in Guillemot Bros, which was founded by previous owners of Ubisoft. Effectively, this grants Tencent a 9.99% stake in Ubisoft.

Assassin's Creed is scheduled to be getting some new information for the series soon. Picture: Ubisoft

Throughout the rumours of acquisitions, the Guillemot family repeatedly stated that Ubisoft was not being sold to anyone. Tencent is not being granted board seats in either company nor will it receive “operational veto rights.” Furthermore, it cannot increase its stake for eight additional years.

“The expansion of the concert with Tencent further reinforces Ubisoft’s core shareholding around its founders and provides the company with the stability essential for its long-term development.” said Yves Guillemot, CEO and Co-Founder, Ubisoft.

“Tencent is a key shareholder partner for many of the industry’s leaders, who have created some of the most outstanding video games. This transaction reinforces our ability to create strong value over the coming years.”

NEWS: Tencent is NOT buying Ubisoft. But it is investing heavily in the company, announcing a new €300 million (about the same in $$) investment—49.9% stake—in Guillemot Bros, the company run by Ubisoft’s co-founders that has the largest stake in Ubisoft.

— Stephen Totilo (@stephentotilo) September 6, 2022

This follows a long line of acquisition efforts that have shaken up the gaming industry as a whole. The largest, of course, is Microsoft’s planned acquisition of Blizzard-Activision, a deal worth $100b, which was recently approved by Saudi Arabia.

Tencent itself recently invested heavily into another gaming giant — FromSoftware, the developers behind Elden Ring and Dark Souls. As a result of its investment, Tencent now owns nearly 16% of the developer.

Finally, Embracer Group has announced its intentions to purchase the Lord of the Rings IP — that includes everything to do with Lord of the Rings, The Hobbit, and anything “Middle-earth”. Embracer has recently purchased several game studios from Square Enix, who sold them off amid fears that its Western studios “cannibalised” their Japanese game sales.

Written by Junior Miyai on behalf of GLHF.