Two months after news broke of Tencent looking to take over Ubisoft and possibly make the company private, negotiations have hit a snag.
Reuters is reporting that Tencent and Guillemot Brothers Ltd, run by the same family that includes Ubisoft co-founder and CEO Yves Guillemot, disagree on how the publisher should be run.
The Guillemot family wants to retain control of the company if Tencent goes forward with a buyout of Ubisoft. Tencent, meanwhile, is concerned about how the Guillemot family would run things. While negotiations are ongoing, Tencent is holding off on finalizing the buyout until the Guillemot family agrees to their conditions.
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Tencent is looking for more influence on future board decisions, with Reuters specifically referencing cash flow distribution in return for financing the deal. Currently, Tencent is the second-largest shareholder of Ubiosft.
News of Tencent’s attempt to buyout the Guillemot family first broke in 2022. They planned to buy stakes from public shareholders and become Ubisoft’s single-larget shareholder. That same year, Tencent CEO Michelle Liu expressed a desire to acquire more AA and AAA gaming partners.
Ubisoft Has Struggled in Recent Years
Known for the Assassin’s Creed and Far Cry franchises, Ubisoft was once regarded as a premier publisher in the gaming industry. However, they’ve been on a major downward trajectory in recent history.
After their stock reached a peak value of over $90 in 2018, it has been on a downward slope ever since. Despite a brief reprieve following the COVID-19 pandemic, it’s been all downhill, with shares currently trading at approximately $13.
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The publisher has been plagued with controversy, including former Beyond Good & Evil 2 director Michel Ancel blaming the game’s troubled development on poor management. Poor management has also led to a delay of Assassin’s Creed: Shadows and an internal investigation of the company following deteriorating profits. Those failing profits weren’t helped by Star Wars Outlaws failing to meet their sales expectations earlier this year.
Additionally, unions for Ubisoft Barcelona are filing a lawsuit against the studio for their return to office mandate.
The studio also recently shut down the live-service game XDefiant and closed studios involved with the game’s development.
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