Insider Gaming has obtained another internal memo from Ubisoft, this time from Christophe Derennes (Zone 1 Managing Director) on the plan for Ubisoft’s new subsidiary with Tencent.
The announcement on the new subsidiary was made on March 27 and thus far, not much detail has been given as to what can be expected moving forward. Officially, we know that certain Ubisoft teams and IP’s will be moving over to the new subsidiary, but details on what it means for the overall company, its future projects, and employees is currently unknown.
On the investor front, Ubisoft stock has fallen a staggering 19% as of the time of writing since the subsidiary news hit the internet. Speaking to one investor, who wished to remain anonymous, he said that the stock price drop is a result of the unknown and how the new structure will work out with Tencent and its cash injection. Another investor casted doubt on the move too, saying that the move means little in the medium to long term if there’s not more changes to the company.
Speaking with employee’s on the move, over half a dozen tell me that internal communication has been fairly lackluster apart from a few company-wide emails. Some tell me that they feel like the deal was probably rushed due to the positive negotiating power Ubisoft had following the initial success of Assassin’s Creed Shadows – but as to when the deal was finalised is unclear.
The apprehension on the future becomes more clear after reading the company’s emails following the subsidiary announcement, and the latest email obtained by Insider Gaming sent from Christophe Derennes paints a clearer picture of why investors and employees are nervous.
But in short, it’s because Ubisoft doesn’t seem to have much of a plan, yet.
You can read the full memo below:
“Hello all –
By now you have seen the message from Yves about the decision to create a new subsidiary that encompasses the three biggest Ubisoft brands: Rainbow 6, Assassin’s Creed, and Far Cry. This new entity will remain part of the Ubisoft family and will continue to be operated by us, with Tencent being a minority shareholder. This important decision is a key turning point for us after the last few difficult years and is an opportunity for Ubisoft to rebuild stronger than ever.
What will this mean for us in Zone 1? Certainly, we can expect some major changes in terms of structure and organization, since these three brands compose a significant part of Zone 1’s population. For now, what we can say is that once the agreement is finalized and confirmed by legal authorities, our Quebec, Saguenay and Sherbrooke studios will move entirely to the new entity, while our Montreal project teams will be spread between the new entity and the current Ubisoft organization. Our studios in Toronto, Winnipeg, as well as Red Storm and Blue Mammoth, will continue evolving in the current organization.
It is still very early in the process and I know you must have many questions, but the short answer to the “what’s next” question is: we need to take the time to figure this out and the next months will be dedicated to determining the transition plan.
Step one was this announcement, where we shared the decision and kicked off the planning phase.
Step two will be from now until this summer, where we will work out how to support the new entity with the existing organization and determine what the new model looks like on both sides. There will be a variety of guided consultations and discussions over the next few months, and your leaders will be involved as we take this opportunity to set up Ubisoft and the new entity for success.
Step three will be the implementation of the new model, with a longer period to complete the transition. Of course, there are many things that have not been determined yet such as who and how we will manage the new entity, what will happen to the structure we have created around the Zone, what will be the impact on the studios, and more. While there are many things that will only be defined during the planning process over the next few months, I can assure you that Ubisoft will continue to be a world class creator of video games, and your great ideas and energy will always be a critical part of our success.
I’m sure you have many questions for which we have no answers yet. Your MDs have also been just recently briefed on this announcement, and like me, don’t have any more information than I do. However, as always, we will try to keep you updated on our progress as we go along and share the latest decisions as soon as we can. In the meantime, we are looking forward to this opportunity of rebuilding a new and stronger Ubisoft, and of maximizing the contributions of all our people.
Thank you for your patience and resilience: living through change is never simple, and this is a big (and important) one for us and for the future of Ubisoft. My ask to you is to keep focusing on what you do best and where you have the biggest impact: making great games that enrich the lives of our players. I’m thankful to be able to count on your cooperation as we move forward together.
Christophe
Managing Director, Zone 1″
What do you think of Ubisoft’s new subsidiary with Tencent and their plan? Let us know in the comments or on our community forum!
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TenCent is a minority holder….. In theory only.
If this minority holder is not heard, the consequences will be severe.