Tencent’s addition to the U.S. Defense Department’s list complicates Ubisoft buyout talks. Could the Chinese gaming giant still take control?

To say that Ubisoft has been in a rough patch for a few years is going to be an understatement. With one misfire after another, the studio’s titles have failed to find success, with some even downright failures. So, when we hear about the studio’s finances being in the dumps, it’s not very surprising.

Shadows has a lot riding on its release. | Image Credit: Ubisoft

For the past few months, even rumors of a buyout have started swirling. The name at the center? Tencent. Despite being under the U.S. government’s watchful eye, reports suggest that Ubisoft’s future could be shaped by this Chinese gaming giant, which is no stranger to navigating tricky waters.

More trouble for Ubisoft? Tencent added to U.S. Defense Department’s List

The company has been flagged as a potential threat to national security. | Image Credit: Ubisoft

Adding more hurdles to Ubisoft’s already challenging path. Recently, it was reported that Tencent has been added to the U.S. Department of Defense’s “Chinese Military Companies” list.

This list isn’t just for show, being included means these companies are seen as potentially having military ties with China’s military, and for Tencent, this could mean even tighter restrictions and the inability to engage freely in business.

In response, the company firmly denied the allegations, claiming it’s not involved in anything military-related at all. But that hasn’t stopped its Hong Kong-based stock from taking a dive.

The company has since stated it will seek a “reconsideration process” and possibly explore legal routes to remove itself from the list.

Despite this major blow to its reputation, a recent report by Bloomberg suggests that the Guillemot family isn’t backing down from their efforts to keep the Chinese Gaming Giant in the fold, as they attempt to stabilize the floundering company.

The studio’s struggles and Tencent’s potential role in the future

The studio has been looking to stabilize itself after a horrible past few years. | Image Credit: Ubisoft

It’s no secret that the once-beloved studio has been losing ground in the gaming industry. Between the unremarkable sales of recent releases and a sharp drop in stock prices, the French studio is in desperate need of a lifeline.

To regain momentum, the studio has taken some steps, like returning to Steam with day-one releases, starting with Shadows. Even with this shift, the studio has a lot to prove, as it’s still in deep water financially and in dire need of a helping hand.

From the looks of it, the Guillemot family, which holds 14%, wants Tencent to be that helping hand, as it currently holds just shy of 10% in the studio. According to the report, the two parties have been discussing how to rescue the company from its downward spiral.

It is not confirmed, but the most prominent idea? Taking the studio private. A move that could allow for some much-needed restructuring and a renewed focus on the core franchises that helped make the company famous, like Assassin’s Creed.

Although these talks are still in their early stages, the pressure is building. And with Assassin’s Creed Shadows looming on the horizon, its success or failure will determine the studio’s bargaining power in any negotiations.

In the end, with the U.S. government’s scrutiny adding another layer of complexity to an already tangled situation, it’s clear that the stakes are high. What’s certain, though, is that the studio’s fate could soon be in the hands of Tencent, and that’s a storyline worth keeping an eye on.