Tencent is actively marching into overseas game market.
On the evening of September 6, Ubisoft Entertainment, a French game company with well-known IPs such as Assassin's Creed and Rayman, announced that Tencent acquired 49.9% shares of its largest shareholder Guillemot Brothers Limited for EUR 300 million, while gaining 5% of the voting rights.
As a result of this acquisition, Tencent's direct stake in Ubisoft increased from 4.5% to 9.99%. According to Ubisoft's statement, of the EUR 300 million spent by Tencent, 100 million were used for investment and 200 million for stock purchases. According to Ubisoft's conversion, Tencent gave a valuation of 80 euros per share in the case of Ubisoft closing at EUR 43.50 apiece on Sept. 6.
Tencent's Q2 earnings report for 2022 showed that game business revenue in the local market fell 1% year on year to CNY 31.8 billion, while game business revenue in the international market also fell 1% year on year to CNY 10.7 billion. The earnings report explains that the local market aspect is related to a series of transitional challenges faced by the company, which include a decline in the number of large game releases, a decrease in user consumption and the implementation of protection measures for minors. And at the same time, Tencent has to face the competition brought by NetEase Games.
Tencent values Ubisoft's influence in the international market, and in 2018, Tencent had acquired a 5% stake in Ubisoft. Ubisoft's statement pointed out that Tencent may not sell Ubisoft shares within 5 years and cannot increase its stake in Ubisoft within 8 years. In addition, Ubisoft's governance will remain unchanged and Tencent will not have any operational veto power.