Ubisoft shares surge on deal to spin off top game franchises

Ubisoft shares surged on Friday after the French video game publisher announced a deal to spin out some of its best-selling franchises.

On Thursday, Ubisoft revealed plans to form a new gaming subsidiary, with Chinese technology giant Tencent investing 1.16 billion euros ($1.25 billion) into the unit.

The subsidiary will include Ubisoft’s best-known games brands, including Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six, according to a press release.

Ubisoft shares jumped 11% as of 10:50 a.m. Paris time.

The game maker said Thursday that its newly formed unit would “focus on building game ecosystems designed to become truly evergreen and multi-platform.”

The investment from Tencent values the new subsidiary at 4 billion euros, Ubisoft said. That’s more than double Ubisoft’s current market capitalization.

Investors were hoping for a move from Ubisoft to clear up uncertainty surrounding its future after a series of challenges faced by the firm in recent years.

Ubisoft has been plagued by various issues, from financial struggles to delays to some of its key games — including its most recently released Assassin’s Creed Shadows title.

In February, the firm reported a 52% drop in fiscal third-quarter net bookings, beset by underperformance of some of its key games.

Ubisoft released its newest title Assassin’s Creed Shadows, the latest installment in Ubisoft’s top game franchise, last week.

The game secured generally positive reviews, getting an average reviewer score of 82 on review aggregation site Metacritic.