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Ubisoft has announced it is working with advisors to explore strategic options, potentially signaling a move toward a buyout deal.

In a statement released on Thursday, the company said: “Leading advisors have been appointed to evaluate and pursue various transformative strategic and capitalistic options to maximize stakeholder value.”

Ubisoft also revealed that its much-anticipated game Assassin’s Creed Shadows will face another delay. Originally scheduled for release last November, the launch had already been postponed to February and is now pushed to 20 March. The company cited a renewed focus on gameplay quality and providing engaging Day-1 experiences as the reason for the delay.

Tencent’s Role in Potential Takeover

The decision to bring in advisors follows reports in October suggesting that Tencent, a major Chinese gaming giant, might collaborate with the Guillemot family to take Ubisoft private.

Tencent currently owns a 9.99% stake in Ubisoft after purchasing 49.9% of holdings from the Guillemot Brothers Ltd. This agreement ensures the founding family retains control of Ubisoft’s governance, with Tencent unable to sell its shares for five years.

Ubisoft’s recent announcement indicates possible progress in negotiations, either with Tencent or other interested parties, regarding a takeover.

“The process will be overseen by the independent members of the Board of Directors,” the company stated. “Ubisoft will update the market if and when a transaction materializes.”

When questioned about the situation, CFO Frederick Duguet declined to provide details, saying, “We are actively exploring various options but cannot share further information at this time.”

Financial Struggles and Lowered Projections

Ubisoft continues to face significant financial challenges, reporting sharp declines in revenue and profit margins during the September quarter. The company’s stock price plunged by 44% in 2024, hitting a decade-low in early October.

In Thursday’s update, Ubisoft further downgraded its financial outlook following previous cuts in September.

Net bookings for the fiscal third quarter are now expected to reach €300 million, down from the earlier projection of €380 million. The company attributed this reduction to weaker-than-expected holiday sales, particularly for Star Wars Outlaws, and the discontinuation of XDefiant.

For the fiscal year 2025, Ubisoft revised its net bookings target to €1.9 billion, down from €1.95 billion set in September. Previously, it had forecast bookings of €2.3 billion for fiscal 2024.

The company also reported a 22% year-over-year decline in first-half net bookings, totaling €642 million, with disappointing performance from new releases such as Star Wars Outlaws. Additionally, Ubisoft reported a negative free cash flow of €126 million during this period.

In response to these financial difficulties, Ubisoft has committed to significant cost-cutting measures. The company now expects to reduce its fixed cost base by over €200 million by fiscal year 2025-26 compared to FY2022-23.

“We are focused on driving substantial cost reductions while maintaining a highly selective approach to future investments,” the company emphasized.