Chinese technology company Tencent has acquired a 5% stake in French video game firm Ubisoft for €220m ($249m). The deal is part of Tencent’s strategy to expand in the gaming sector globally, and provides the firm with a prominent role in the valuable Chinese market, where it currently holds a dominant position. Ubisoft’s stock price rose by 4% following the announcement. Tencent has already invested in Epic Games, Riot Games and Activision Blizzard.
Tencent acquires stake in Ubisoft
Background
Ubisoft is a French video game publisher founded in 1986. The company is known for franchises such as Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six. Tencent is a major Chinese technology company that operates social media, entertainment, and gaming businesses. Tencent has been investing in video game companies around the world to expand its gaming empire.
The Acquisition
Tencent has acquired a 5% stake in Ubisoft, according to a filing with French financial regulators. The deal, worth approximately €220 million, makes Tencent one of Ubisoft’s largest shareholders. Ubisoft’s founders, the Guillemot family, still control the company with a combined 18.5% stake.
Impact on Ubisoft
Tencent’s investment may help Ubisoft expand its presence in the lucrative Chinese market, where Tencent holds a dominant position. Tencent also has significant experience in mobile gaming, which Ubisoft has been trying to expand into. Ubisoft’s stock price rose by 4% following the announcement.
Reaction from Ubisoft
“We’re thrilled to welcome Tencent as a long-term shareholder,” said Yves Guillemot, co-founder and CEO of Ubisoft. “This partnership will allow Ubisoft to accelerate its growth in China and expand into new areas of the mobile market.”
Reaction from Tencent
“Ubisoft has a rich history of creating exciting and engaging games that resonate with players around the world,” said Martin Lau, President of Tencent. “We’re looking forward to working with Ubisoft to bring even more of their great games to players in China and beyond.”
Industry Analysis
The acquisition is part of Tencent’s strategy to expand its presence in the global gaming market. Tencent is already the world’s largest video game company by revenue, and has invested in companies such as Epic Games, Riot Games, and Activision Blizzard. Tencent’s massive user base in China gives it a significant advantage in reaching new players and expanding its portfolio of games.