Support NeoGAF

[Mattyp]

I think the shareholders would be pretty screwed in that scenario and the 75% of the subsidiary owned by Ubisoft would be sold off to pay Ubisoft's creditors (maybe the Ubisoft shareholders would get a payout if there was anything left after paying the creditors?)

If eg. Microsoft bought that 75% previously owned by Ubisoft, then the subsidiary would become a subsidiary of Microsoft.

I'm no expert though.

This is exactly what happens, they’re creating a buffer in ownership.

Ubisoft shares should be delisted at this point, they’re able to sell off subsidiary's on the boards vote so when they know the ships about to sink they sell off the only viable assets back to themselves or another company they’ll soon get a chair position at.

If Ubisoft goes under tomorrow share holders won’t get access to these new groups they’ll be sold off. They’re parting out the company for the most valuable assets, equivalent of a company buying a shit business that owns great realestate. Let the company bankrupt its self while then selling off $X in land value to develop houses on instead after it goes under.

Much better optics along with the tax write down instead of buying a company and firing everyone the next day.

 

[Ryu_Joestar]

 

[MayauMiao]

Come on, Tencent. Give us Ass Creed anime waifu edition.

 

[Pasta la Vista]

Last ditch effort, but Tencent basically paid pennies for this

 

[Ozriel]

I don't even know what to tell you. We live in world where comparable in scale and scope of production CoD cost like 700mil with marketing. AC is CoD-level multiplat franchise and I have a feeling that I'm being quite modest here, considering all the delays and further marketing damage control.

The $700 mln figure for COD included marketing and the full lifecycle live service support. Sony years of additional content development etc. COD itself is already baseline more expensive since it rolls in SP and MP, including lots of MP content for launch.

crediting other studios doesn’t remotely imply that majority of people at the studios worked on the game.

It means this the subsidiary will be managed by completely new executives , and Ubisoft will not have any business decision over these titles , the new subsidiary will have the right to do whatever they want with these titles which mean you might get a better games

The games are still being made by the exact same people, with the exact same studio executives. From a gameplay perspective, you’re not getting any radical changes. Especially when these are major IPs with established gameplay.

I’d argue that we’ll see more change with the other franchises/IP not included in this subsidiary. Because they’d have to now work to exploit stuff like Ghost Recon, Division, Rayman etc.

The contract is stating that Ubisoft will not have any business decision over the subsidiary for 2 years

No such clause exists in what has been publicly released. In fact, the text says otherwise, with Ubisoft owning 75% of the subsidiary.

The whole point is that this company will be completely managed by new people from tencent and this could mean producing better games.

 

[Yoda]

Sucks for the employees left at the existing entity, probably massive re-orgs and layoffs.

 

[Kotaro]

Tencent got scammed by the Guillemots

Those IPs not worth 4 billion dollar

 

[calico]

Yes, they do 2B/year

If you take in $2bn and it costs you more than $2bn to do it, you didn't make anything.

 

[San Dan Glokta]

Hmmmmmmmm

So I was right?

 

[evanft]

It really is amazing seeing how poor most people's reading comprehension skills are.

 

[Felessan]

Tencent got scammed by the Guillemots
Those IPs not worth 4 billion dollar

IPs with 2bn revenue worth 4 bn

If you take in $2bn and it costs you more than $2bn to do it, you didn't make anything.

Tencent don't buy the cost. They buy a clean company. If they manage it to get at least 15% operating margin, that is quite feasible, it'll make x13 multiplier, that is not bad investment for Tencent.

 

[calico]

IPs with 2bn revenue worth 4 bn


Tencent don't buy the cost. They buy a clean company. If they manage it to get at least 15% operating margin, that is quite feasible, it'll make x13 multiplier, that is not bad investment for Tencent.

I'm talking about the false claim that Ubisoft is currently making $2bn per year. It isn't. It's made a loss over the last five years.

If you take Ubisoft's best IPs and have them managed competently with the aim of making money -instead of being used incompetently with the priority being political activism- can it be profitable in the future? Sure.

 

[Black_Stride]

Black_Stride how you doing?

Didn't even manage to last a year longer than the date of our discussion.

Fantastic drugs by the way.

Am I missing something or did you not read the press release?
Ubisoft is still the Majority holder of [Ubisoft Core*] Tencent is 25%. (actualy currently Ubisoft is 100% owner)
While they do have veto rights, 25% is not exactly owning a company especially when you consider Ubisoft Major has a much bigger stake.
The remining Ubisoft is still Ubisoft.


Call me when when Ubisoft and Ubisoft Core are both NOT owned by Ubisoft.
Ubisoft has a 2 year lock in on being majority holder of Ubisoft Core btw.

If anything this cements my post that Ubisoft most certainly is gonna survive the generation with ease now, Tencent is giving them 2bn dollars for basically 3 titles?
They walk the generation.

*Calling the new subsidiary Ubisoft Core cuz its the core titles it manages, the document doesnt tell us what the official name of the subsidiary is.





P.S The green wouldnt melt your mind like that.
Clearly you are on some other shit.

 

[pepeno]

Soft Takeover.
Eliminates the family owning issue.
Sort of a roundabout way of Tencent owning that part which is the important bit and the other owning the overall company.
Similar thing happened with United And INEOS.

That's not what happening. Some facts first:

1. Guillemonts family own 51% of ubisoft (they decide everything and rest of shareholders can't do anything to oppose).
2. While their games sell their profits are not rising fast enough to cover cost of 10 000+ developers workforce and they had recently string of failures that were very costly.
3. Ubisoft has almost 2B in debt because of mentioned above failures as games are made via debt.
4. Interest rates on debt are very high right now across the globe as lenders fear coming financial crash and instability so that 2B stings a lot more in 2025 than in say 2020 where interest rates were nearly 0%.
5. Majority of Ubisoft workers are in France with very strict labor laws and unions. They can't be fired easily and getting rid of thousands of workers there would for 100% cause government to be involved in this mess.

So what you have is effectively company loaded with debt on high interest rate, with valuable ips but ton of dead weight (all other ubi projects) that even if they achieve success they can't change company.

Now try to be new investor and think in what you think you should put your money in... In company like above ? Or in something else entirely ?

So this is what Guiilemonts did just now:

- they made new company
- they transferred rights to most important ips there.
- they transferred main teams behind those main ips.
- they got new investor Tencent which holds 25% of company and old Ubisoft 75%

So new company with all important apples, 0 debt, best workforce old ubisoft had and guillemonts owning aprox 35% controlling stake in company (they own 51% of ubisoft's 75% stake).

Old ubisoft now is effectively a shell company. Still has rights to ips like assasin but have no proper teams to make them, ton of dead weight workers who make smaller games or b-teams but loaded with debt up to their gills with only two higher revenue projects like division 3 and ghost recon just to not make it so obvious to old investors.

See what they did ? They just loaded up silverware onto their yachts and ran. Now that everything is done they can sell old ubisoft to embracer or any other fool as still it has rights to ips take that money force buyout on on that 49% of small investors and take 75% stake in that company fully owning it and probably still have decent money for hookers and pool parties for next 150 years for whole family.

The only way in which this can't work is if new owners of old Ubisoft will manage it very well and new assasins, far crys from them will be hits to overshadow new company assasins, far crys etc.

....good luck with that french striking workforce, 2B debt and no teams with experience to make new amazing games from those major ips.

 

[Kotaro]

IPs with 2bn revenue worth 4 bn


Tencent don't buy the cost. They buy a clean company. If they manage it to get at least 15% operating margin, that is quite feasible, it'll make x13 multiplier, that is not bad investment for Tencent.

Revenue don't tell the whole story. Those are money losing IPs. That's what got Ubisoft in their current predicament in the first place

Tencent got fleeced

 

[Felessan]

I'm talking about the false claim that Ubisoft is currently making $2bn per year. It isn't. It's made a loss over the last five years.

They are making 2bn in revenue
And even loss is a false claim, they float slightly above zero with some dips below on write-offs

Ubisoft net income 2024 | Statista

In the financial year 2023-24, which ended in March 2024, French video game producer Ubisoft reported a net income of 157.9 million euros, up from a net loss of close to 495 million euros in the previous year.

www.statista.com

Revenue don't tell the whole story. Those are money losing IPs. That's what got Ubisoft in their current predicament in the first place

Tencent got fleeced

It's usually easier to streamline processes and get reasonable margin than grow revenue, especially given that it's a new company
And those IPs are not losing money, they are profitable.

 

[calico]

They are making 2bn in revenue

Wanna give me $1000 in exchange for $100? You'll make $100!

What do the last five numbers on your chart add up to?

 

[Felessan]

Wanna give me $1000 in exchange for $100? You'll make $100!

$1000 in debt and you'll pay me $100 per year. It's 10% interest, not a bad deal and I still hold you obliged me $1000

What do the last five numbers on your chart add up to?

Adjust 23 number by 500 mil write-off that has little to sold franchises and you'll get a steady but small profit

 

[Sharius]

oky tencent, there is 2 hour long credit list all guy you want to kick out of the company, do the god work

 

[calico]

$1000 in debt and you'll pay me $100 per year. It's 10% interest, not a bad deal and I still hold you obliged me $1000

No, we weren't talking about borrowing. Focus. You were mistakenly attempting to correct my statement that a company which spends >$2bn to receive $2bn is not making anything.

Adjust 23 number by 500 mil write-off that has little to sold franchises and you'll get a steady but small profit

We were discussing Ubisoft as it has existed. Why would we ignore a $500m loss when working out whether a company is running at a loss? I imagine most companies running at a loss -as Ubisoft has been- could be considered profitable if you choose to ignore or set aside everything which makes them not profitable.

 

[TrebleShot]

That's not what happening. Some facts first:

1. Guillemonts family own 51% of ubisoft (they decide everything and rest of shareholders can't do anything to oppose).
2. While their games sell their profits are not rising fast enough to cover cost of 10 000+ developers workforce and they had recently string of failures that were very costly.
3. Ubisoft has almost 2B in debt because of mentioned above failures as games are made via debt.
4. Interest rates on debt are very high right now across the globe as lenders fear coming financial crash and instability so that 2B stings a lot more in 2025 than in say 2020 where interest rates were nearly 0%.
5. Majority of Ubisoft workers are in France with very strict labor laws and unions. They can't be fired easily and getting rid of thousands of workers there would for 100% cause government to be involved in this mess.

So what you have is effectively company loaded with debt on high interest rate, with valuable ips but ton of dead weight (all other ubi projects) that even if they achieve success they can't change company.

Now try to be new investor and think in what you think you should put your money in... In company like above ? Or in something else entirely ?

So this is what Guiilemonts did just now:

- they made new company
- they transferred rights to most important ips there.
- they transferred main teams behind those main ips.
- they got new investor Tencent which holds 25% of company and old Ubisoft 75%

So new company with all important apples, 0 debt, best workforce old ubisoft had and guillemonts owning aprox 35% controlling stake in company (they own 51% of ubisoft's 75% stake).

Old ubisoft now is effectively a shell company. Still has rights to ips like assasin but have no proper teams to make them, ton of dead weight workers who make smaller games or b-teams but loaded with debt up to their gills with only two higher revenue projects like division 3 and ghost recon just to not make it so obvious to old investors.

See what they did ? They just loaded up silverware onto their yachts and ran. Now that everything is done they can sell old ubisoft to embracer or any other fool as still it has rights to ips take that money force buyout on on that 49% of small investors and take 75% stake in that company fully owning it and probably still have decent money for hookers and pool parties for next 150 years for whole family.

The only way in which this can't work is if new owners of old Ubisoft will manage it very well and new assasins, far crys from them will be hits to overshadow new company assasins, far crys etc.

....good luck with that french striking workforce, 2B debt and no teams with experience to make new amazing games from those major ips.

So with Tencent owning 10% of Ubi and then 25% of the subsidary does it have an impact on overall ownership? I think Guillemonts family is only majority shareholder of Ubi proper by a small margin.
Essentially the deal gives Tencent controlling majority over the franchises and creative control?

 

[PeteBull]

Come on, Tencent. Give us Ass Creed anime waifu edition.

 

[Baemono]

I read articles in French, basically it will help reducing the debt Ubisoft cumulated throughouth the years (1.4 billion EUR) with the new money coming from Tencent (1.163 billion EUR) in exchange of new shares in a new company. The valuation is said to be helped by the success of AC Shadows, so the timing is good.

Ubisoft can't sell its shares in this new company for 2 years, and Tencent cannot increase its participation in this company for 5 years apparently.

 

[missiles]

I can't believe Asmongold did this.

 

[Ozriel]

Revenue don't tell the whole story. Those are money losing IPs. That's what got Ubisoft in their current predicament in the first place

Tencent got fleeced

None of those are money losing IPs. Tencent’s losses are from canceling three games greenlit during the pandemic, then the underperformance of Avatar, Skull and Bones and Star Wars outlaws.

The IP transferred to this subsidiary are popular and profitable.

So with Tencent owning 10% of Ubi and then 25% of the subsidary does it have an impact on overall ownership? I think Guillemonts family is only majority shareholder of Ubi proper by a small margin.
Essentially the deal gives Tencent controlling majority over the franchises and creative control?

No, it does not. Tencent does not have anything close to controlling majority or overall creative control.

As a key investor, they’ll certainly have a significant say in what gets made.

 

[Denton]

Ubisoft being sold for parts, to Tencent no less, is not a welcome development, however I loathe many of their design practices (and resulting games) lately.

 

[ChuckeRearmed]

Ubisoft is done.

 

[PeteBull]

None of those are money losing IPs. Tencent’s losses are from canceling three games greenlit during the pandemic, then the underperformance of Avatar, Skull and Bones and Star Wars outlaws.

The IP transferred to this subsidiary are popular and profitable.



No, it does not. Tencent does not have anything close to controlling majority or overall creative control.

As a key investor, they’ll certainly have a significant say in what gets made.

U reckon new tencent overlords allow AC: Ancient China to be similar disgrace to them like AC:S was to japanese ppl?

We all remember how chinese versions of black panther and star wars looked like

Outrage over Chinese 'Black Panther' poster isn't all it seems

It appears that the poster for the Chinese release of the forthcoming Marvel movie Black Panther has a marked difference from the posters seen elsewhere.

uk.movies.yahoo.com

‘Star Wars’ China Poster Sparks Controversy After Shrinking John Boyega’s Character

The "Star Wars: The Force Awakens" China poster shrunk or removed all non-white characters, including black actor John Boyega's Finn.

variety.com

 

[GHG]

Am I missing something or did you not read the press release?
Ubisoft is still the Majority holder of [Ubisoft Core*] Tencent is 25%. (actualy currently Ubisoft is 100% owner)
While they do have veto rights, 25% is not exactly owning a company especially when you consider Ubisoft Major has a much bigger stake.
The remining Ubisoft is still Ubisoft.


Call me when when Ubisoft and Ubisoft Core are both NOT owned by Ubisoft.
Ubisoft has a 2 year lock in on being majority holder of Ubisoft Core btw.

If anything this cements my post that Ubisoft most certainly is gonna survive the generation with ease now, Tencent is giving them 2bn dollars for basically 3 titles?
They walk the generation.

*Calling the new subsidiary Ubisoft Core cuz its the core titles it manages, the document doesnt tell us what the official name of the subsidiary is.





P.S The green wouldnt melt your mind like that.
Clearly you are on some other shit.

Yes, let's ignore the fact that Tencent stepping in is the only thing that's stopped them defaulting on their debt this quarter and going under.

 

[Laptop1991]

This deal with the Gullemot family still in charge will only prove fruitful depending how their future games will sell and the profit they make with games like Skull and Bones, which don't interest me, i've seen the many debates on here whether Shadows is a success or not and the sales data will come out in due course, but for me if they don't make better games then this deal is just a stop gap and won't change anything in the long run as the same people are still in charge.

 

[Killer8]

People forget that Ubi has had a string of failures now. Even if Shadows was a soft success, it was never going to be enough to reverse their fortunes. A deal like this would've been in the works for months if not years by now, and i'd bet that the impetus for it happening was more likely Skull and Bones and Star Wars Outlaws failing.

If anything the IPs chosen to spearhead this new venture are the most successful in their stable / most likely to make money, and it's being done to protect them from Ubisoft proper going belly up.

 

[PeteBull]

This deal with the Gullemot family still in charge will only prove fruitful depending how their future games will sell and the profit they make with games like Skull and Bones, which don't interest me, i've seen the many debates on here whether Shadows is a success or not and the sales data will come out in due course, but for me if they don't make better games then this deal is just a stop gap and won't change anything in the long run as the same people are still in charge.

I look at it similar to how sony dealt with bungie, they got their foot in the door first, then graudually took whole control, which likely gonna happen in this case here in due time if ubi keeps themself going on current path to destruction.

 

[ValiantInstance]

I look at it similar to how sony dealt with bungie, they got their foot in the door first, then graudually took whole control, which likely gonna happen in this case here in due time if ubi keeps themself going on current path to destruction.

They should've pimped themselves out to Microsoft. They would've let them continue to pump out mid games full of microtransactions no questions asked.

 

[Ozriel]

U reckon new tencent overlords allow AC: Ancient China to be similar disgrace to them like AC:S was to japanese ppl?

We all remember how chinese versions of black panther and star wars looked like

Outrage over Chinese 'Black Panther' poster isn't all it seems

It appears that the poster for the Chinese release of the forthcoming Marvel movie Black Panther has a marked difference from the posters seen elsewhere.

uk.movies.yahoo.com

‘Star Wars’ China Poster Sparks Controversy After Shrinking John Boyega’s Character

The "Star Wars: The Force Awakens" China poster shrunk or removed all non-white characters, including black actor John Boyega's Finn.

variety.com

Ubisoft will certainly look to stay away from controversial topics going forward, though you should brace yourself…you may still see some black people in their games.

I look at it similar to how sony dealt with bungie, they got their foot in the door first, then graudually took whole control, which likely gonna happen in this case here in due time if ubi keeps themself going on current path to destruction.

‘Foot in the door’?
Sony wholly bought Bungie. They owned them, lock, stock and barrel.
Tencent doesn’t own a controlling share in either Ubisoft proper or the new subsidiary. They’ve had a ‘foot in the door’ for many years now.

Do you like to compare Apples to Oranges?

 

[Felessan]

No, we weren't talking about borrowing. Focus. You were mistakenly attempting to correct my statement that a company which spends >$2bn to receive $2bn is not making anything.

Tencent does not receive 2bn, it gets a share in company with strong IP and revenue stream fair value of which is unknown, but I doubt Tencent overpaid, they are in this particular business for a long time - they have stakes in game studios all over the globe, and many of them are profitable, like Wukong and Stellar Blade studios

Market cap in no way a representation how much company really worth as a whole for potential buyer
MS bought Bethesda at x2 valuation and ATVI at x1.5 (at the time of announcement) - buying 1 share is not the same as buying even blocking stake of 25%

We were discussing Ubisoft as it has existed. Why would we ignore a $500m loss when working out whether a company is running at a loss? I imagine most companies running at a loss -as Ubisoft has been- could be considered profitable if you choose to ignore or set aside everything which makes them not profitable.

Because it has nothing to do to what Tencent is buying. Tencent doesn't buy Ubi as a whole with it's internal problems etc. It buys specific part that historically provides positive results and not linked to one-off losses

 

[calico]

Tencent does not receive 2bn, it gets a share in company with strong IP and revenue stream fair value of which is unknown, but I doubt Tencent overpaid, they are in this particular business for a long time - they have stakes in game studios all over the globe, and many of them are profitable, like Wukong and Stellar Blade studios

Market cap in no way a representation how much company really worth as a whole for potential buyer
MS bought Bethesda at x2 valuation and ATVI at x1.5 (at the time of announcement) - buying 1 share is not the same as buying even blocking stake of 25%


Because it has nothing to do to what Tencent is buying. Tencent doesn't buy Ubi as a whole with it's internal problems etc. It buys specific part that historically provides positive results and not linked to one-off losses

Ok you have totally failed to follow the conversation that was happening and are having some other conversation with yourself. Never mind.

 

[Topher]

Hmmmmmmmm

So I was right?

This isn't a bail out though.

 

[RCX]

So the rest of Ubisoft is worth zero?

If thats the case I'm offering them $10 for the rights to Rayman. I will have my Legends sequel!

 

[Zacfoldor]

It really is amazing seeing how poor most people's reading comprehension skills are.

A lot of the time when you want something not to be true you only look at the exact text and find comfort there. Others may be able to read between the lines a little better. In this case, I'm sure you won't agree, but there is more to this than what the text says. I'm sure we will all find out soon enough. Don't worry, for those of us who predicted this would happen we also predicted what will happen next. A big part of that is finding out how AC Shadows actually did.

 

[Bernardougf]

"Success"

 

[Bernardougf]

Can't wait for the journalist cope. Why would they need to do this with such a massive success like Shadows being just released?

With article after article about new player numbers being reached, such and such milestone being hit, record release on platform X, best in the series at Y.

It's almost as if the hail Mary that was Shadows didn't land.

What a fucked up hail mary ... lets do a highly divisive controversial game as a hail mary. Modern Woke business 101

 

[lifa-cobex]

Well fuck Ubisoft with it's storefront games.
Not sure Tencent will be much better but at least that will mean the end of the DEI bs.

It was genuinely amazing me how some people thought all was well with Ubi.
AC shadows needed to sell BIG numbers. The sort of numbers that would have blown everyother game out the waters for the year.

 

[ChuckeRearmed]

So the rest of Ubisoft is worth zero?

If thats the case I'm offering them $10 for the rights to Rayman. I will have my Legends sequel!

Well if the evaluation if this company is 4b (though it will go down eventually), and whole Ubisoft is 1.8b, then the remaining part of it is very cheap at this point.

 

[bighugeguns]

Hope the guys selling to Tencent realize there are video games tariffs on the way.

 

[EN250]

So basically, Tencent gets the best Ubi has left and allows Ubi to keep breading for some time, everything else gets dumped cause it's not valuable and tbf, Ubi didn't do shit, so why complain now

So long The Division, Splinter Cell and the others...

 

[diffusionx]

I'm talking about the false claim that Ubisoft is currently making $2bn per year. It isn't. It's made a loss over the last five years.

If you take Ubisoft's best IPs and have them managed competently with the aim of making money -instead of being used incompetently with the priority being political activism- can it be profitable in the future? Sure.

the point of operations like this are to unlock underutilized and depressed assets.

For a decade Ubisoft took all that Rainbow Six Siege money and used to make shit like Skull & Bones and Star Wars Outlaws and pay probably 10,000 people who did no work. And even R6 Siege has been totally mismanaged and made ridiculous because of the negative influence of the broader Ubisoft organization.

 

[Pop]

Poor Division

Ubi has abandoned you

 

[Mikado]

Poor Division

Ubi has abandoned you

So I guess the likelihood of seeing another The Division - a game about a world-crippling flu virus - is pretty much zero now

 

[LordBlodgett]

This is Tencent's way of forcing Ubisoft to clean their shit up. Revenues/Profits from these big money-making titles will no longer be able to be used for projects like Skull & Bones. I would also imagine they will only move the best employees over to this organization, while leaving the original to flounder into bankruptcy and layoffs.

 

[Robot Carnival]

I don't really care about this take over one way or another, but I was watching a video about this whole shitshow and saw a comment that cracks me up. something along the line of "Ubisoft should just accept not owning their company." and that just cracked me the hell up.