Ubisoft Shares Surge Nearly 30% after Tencent Buyout Rumors

Rumors about Tencent planning to buyout Ubisoft has skyrocketed Ubisoft’s shares. As per the leak, Guillemot Brothers Limited and Tencent are considering options which might save Ubisoft from a financial slowdown. In 2023, Ubisoft’s financial report revealed that the company faced a significant operating loss.

On top of this, a lot of Ubisoft employees were also affected by the wave of layoffs. It’s no secret that the gaming industry isn’t exactly doing well, but Asian giants like Krafton and Tencent have stepped in to save the day.

The Value Of Ubisoft’s Shares Signficantly Increased After Tencent Buyout Rumors Went Viral

As per Bloomberg, Guillemot Brothers Limited, a shareholder of Ubisoft, along with Tencent are considering options including a potential buyout of Ubisoft. As these rumors went viral, Ubisoft’s shares surged over 30%, setting the biggest one-day jump record. The company lost more than half its market value this year. The report also claims that these giants are also planning to team up to take the company private.

Right now, Guillemot Brothers Limited owns 15% of the firm, followed by Chinese gaming giant Tencent which owns just under 10%. This move will significantly boost Ubisoft, which has been struggling to keep up with the competition. The video game publisher has been suffering from various setbacks, including the sudden delay of its highly anticipated game, Assassin’s Creed Shadows.

Ubisoft Faced An Operating Loss Of Roughly $550 Million In 2023

Reuters reported in 2023 that Ubisoft suffered a full-year non-IFRS operating loss of €500.2 million ($550.6 million), which was majorly due to game cancellations and delays. Tencent and Guillemot Brothers Limited to stabilize and boost Ubisoft, so if this report turns out to be true, it will be a good decision for Ubisoft.

Ubisoft recently invested a lot of its funds in developing the Call of Duty-killer, XDefiant. The game is just another example of Ubisoft’s poor strategy as XDefiant had a good start, but soon it lost most of its fanbase. Even Ubisoft’s 2024 game, Star Wars Outlaws, failed to meet the sales expectations, proving to be another financial setback for the company.

Guillemot Brothers Ltd, Ubisoft’s founders, along with Tencent can save Ubisoft from dissolving with this decision. Even Krafton recently stepped in to save Tango Gameworks after Microsoft announced its shut down. The South Korean giant was eager to save the studio and wanted it to continue the development of Hi-Fi Rush 2.

Do you think making Ubisoft a private firm would solve the problem? Share your views in the comments!