Tencent’s €1.16bn Ubisoft investment on track to close in coming days as H1 bookings rise

• Ubisoft set to pay off some of its loans, €210m of which had been due next month.
• Ubisoft will resume trading today following a restatement of its fiscal 2025 reports, revised due to the recognition of a meaningful partnership deal.
• Vantage Studios will house key IPs Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six.
• Ubisoft Q2 net bookings up 39% year-over-year; H1 bookings rise 20%.
• Mobile accounted for 5% of bookings in Q2; Made up 7% of bookings in H1.

Chinese publishing giant Tencent’s €1.16 billion investment into Assassin’s Creed maker Ubisoft is on track to close in the coming days.

Ubisoft said the move would deleverage the company by enabling an early repayment of the €286 million Term Loan and Schuldschein loans. Of this, €210m had been due next month.

It will formally establish a new subsidiary, Vantage Studios, which Tencent will have a 25% stake in. The company is already a major investor in Ubisoft.

The new unit, labelled as the first ‘Creative House’ at the publisher, will be responsible for IPs such as Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six.

Ubisoft claimed the new subsidiary will operate under three guiding principles: autonomy, focus and player centricity. Meanwhile, a new leadership team is being formed, including heads of franchises.

In July, Ubisoft named North America MD and company veteran Christophe Derennes and ex-Owlient studio manager Charlie Guillemot as the co-CEOs of the subsidiary.

The company said Tencent’s investment would also support selected investment opportunities across the group and facilitate reorganisation efforts. Ubisoft has targeted at least €100m in savings by FY 2026-27 as part of its cost reduction program that has led to layoffs.

Trading halt

Prior to the release of its Q2 financials, Ubisoft halted the trading of its shares and delayed publishing its report at the last minute. The company’s newly appointed panel of auditors asked the firm to restate its 2025 accounts to recognise a meaningful partnership deal.

Ubisoft said this led to the company not complying with its leverage covenant ratio under certain existing financing agreements. This is being addressed with funds from the Tencent deal.

Ubisoft will resume trading today following the restatement and publishing of its financials.

Q2 and H1 financials

Ubisoft reported that Q2 net booking exceeded expectations, hitting €490.8m, up 39% year-over-year, versus guidance of around €450m.

For H1, Ubisoft net bookings were €772m, up 20% Y/Y. Digital revenues were said to amount to €686m, a rise of 30% Y/Y.

The first half year saw 34m monthly active users and 88m unique active users - though this was slightly down when excluding XDefiant, the firm said.

Mobile accounted for 7% of net bookings in H1, versus 9% the year prior. In Q2, bookings made up 5%, versus 8% the year prior.

Ubisoft said outperformance of its bookings target in Q2 were driven by stronger-than-expected partnerships, demonstrating meaningful contribution from live TV and animated series. It should be noted, however, the company’s back catalog made up 96% of net bookings in H1, which were up 50% Y/Y to €741m.

Excluding partnerships, Ubisoft described its back catalog as robust and in line with expectations. The Assassin’s Creed franchise overperformed, though Rainbow Six Sieger had a “softer” performance, in part due to heavy competition in the FPS genre.

Group-wide transformation

“The closing of our strategic transaction with Tencent – which will see Tencent become a minority shareholder in our new subsidiary, Vantage Studios – is now imminent, as all conditions precedent have been satisfied,” said Ubisoft CEO Yves Guillemot.

“This marks a pivotal milestone in Ubisoft’s transformation, significantly strengthening our financial position by bringing in €1.16 billion of cash, enabling the Group to deleverage, as planned. It will also empower Vantage Studios to accelerate the growth of our three flagship IPs under a dedicated leadership team.

“In a highly competitive market, Ubisoft delivered net bookings above guidance, on the back of stronger-than-expected partnerships that underscore the appeal and reach of our brands. Our portfolio showed contrasting dynamics this quarter, with softer trends for Rainbow Six Siege, reflecting a phase of evolution for the game in an intense FPS environment, offset by strong performances across the rest of the catalog.

“The Assassin’s Creed franchise exceeded our expectations, confirming its positive momentum and ability to engage players over time. The Division 2 also continued to perform strongly, benefiting from the momentum of the Battle for Brooklyn DLC, with the game’s first semester already exceeding last year’s annual bookings.

“Additionally, the progress we’ve made in addressing our fixed cost base brings with it confidence that we can continue to drive structural efficiencies across the organisation that, together with top line growth, will contribute to ensure a return to strong cash generation in the coming years.

“Vantage Studios represents a key element of the transformation of the company towards a new operating model built around Creative Houses. We will have finalised the design of this new organisation by the end of the year. These Creative Houses will be autonomous, efficient, focused and accountable business units, each with its own leadership, creative vision and strategic roadmap.

“This Group-wide transformation reflects our ambition to renew how we create and operate in order to deliver great games for our players and lasting value for our partners and shareholders. The full details of this new operating model will be unveiled in January.”