Game Over? Ubisoft sinks as investors rage over Tencent tie-up

 

A bloody red week. Not just for a few unlucky names, but for all financial markets, across all sides of the great oceans. So, with candidates aplenty for this week’s Fiery Flash, we’ve taken the simplest and sharpest approach: spotlighting the biggest decliner in the Euro Stoxx 600. Our Fiery Flash of the week is Ubisoft Entertainment, the once high-scoring gaming giant in a world that's becoming more gamified by the day by geopolitcal power struggles. You would think that a company grounded in digital entertainment would be a safer haven amid growing trade tensions. After all, it’s the physical goods getting hit hardest by new tariffs. But the reality is less comforting. Tariffs threaten to dent demand for physical consoles, gaming rigs, headsets, mice, and even boxed games (what’s left of them). Add to that a potential slump in private consumption, and even the digital side of the business starts to wobble. And then, of course, there are company-specific fundamentals.

Ubisoft has had a chaotic ride. After jumping more than 10% in late March on the back of a €1.16 billion investment from Tencent, its shares have since cratered. As of April 4, 2025, the stock has plunged roughly 29% from its post-deal high, now trading at just €9.3.

Ubisoft is a French video game publisher known worldwide for its hit franchises: Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six. Its global operations and legacy of immersive storytelling have made it a cornerstone of the gaming industry for decades. But in recent years, it's struggled to keep pace with more agile and execution-focused peers.

The firestarter was a new €4 billion-valued subsidiary housing Ubisoft’s top-tier franchises. Tencent bought a 25% economic interest in this unit for €1.16 billion. The cash was meant to reduce debt, accelerate transformation, and refocus efforts on Ubisoft's crown jewels. Initially, investors cheered the move, interpreting it as a much-needed financial lifeline. But that optimism quickly soured. A coalition of shareholders publicly challenged the deal, arguing it was structured to avoid triggering a public takeover bid and designed to consolidate control under the Guillemot family, who now hold under 10% of Ubisoft’s economic interest. An open letter even demanded renegotiation and legal action, an ‘extremely rare show’ of rebellion in France's corporate landscape.

Operationally, Ubisoft has had a hard reset. While the gaming industry boomed in the pandemic years of 2020-2021, Ubisoft failed to fully ride the wave. The years since have been defined by misfires: repeated delays, underwhelming launches, and internal turbulence. Its latest results, third quarter 2025 results released in February, were brutal: net bookings fell 52% year-over-year, hammered by a lack of fresh hits and the ongoing delay of Skull and Bones. Cost-cutting efforts like studio closures and layoffs have yet to translate into a clearer path to profitability. Competitors like EA and Take-Two, by contrast, are executing more reliably, with robust content pipelines and steadier monetization models.

This was supposed to be Ubisoft’s comeback quarter, fueled by Tencent’s cash and a renewed focus on blockbuster IP. Instead, the stock has nosedived, and investor unrest is dominating headlines. Market sentiment has swung from cautious optimism to deep skepticism. With fundamental performance still lagging and governance concerns mounting, Ubisoft now finds itself not just in a content battle, but in a credibility crisis. Whether it can regain investor trust remains the real game to win. The same can be said for trust in global trade, particularly in the face of a growing tariff storm.