Normally, when your company locks arms with a $400 billion monopoly in its respective industry, your stock doesn’t crater 13%. I mean, that’s the dream, right? If Kroger ever partnered with Costco (yes, that’d make zero logistical sense, but roll with it), you’d expect Kroger investors to all open their investing apps at once and add to their existing positions… without even reading the details of the partnership.

But here we are. Ubisoft, the French video game maker best known for Assassin’s Creed, Far Cry, and Tom Clancy’s Rainbow Six, just got a $1.25 billion investment from Chinese megacorp Tencent… and investors responded like Ubisoft had just announced bankruptcy.

Tencent is now throwing real cash at Ubisoft’s new spin-off company… a unit that’s taking over its household names: Assassin’s Creed, Far Cry, and Rainbow Six. Tencent gets 25% of this new joint, which is valued at around $4.3 billion USD… more than double Ubisoft’s entire current market cap. (Yep, Tencent pretty much said, “We’ll take the good half.”) Oh, and they also now own nearly 10% of Ubisoft’s parent company too. You’d think investors would be stoked. Big names. Big games. Big money. What’s not to love? Well… everything else.

While Tencent’s money is exciting, the structure of the deal is giving off major “we had no choice” energy. Investors wanted clarity after years of delays, disappointing sales (cough Star Wars Outlaws cough), and a bloated workforce that somehow rivaled Microsoft Gaming. Instead, they got a new “innovative” holding company that might as well be Ubisoft’s Greatest Hits playlist… while the rest of the business is left behind to play elevator music.

According to analysts, the real reason for this spinoff may be the Guillemot family (who founded Ubisoft) wanting to keep control without selling the whole thing. TD Cowen even said the remaining part of Ubisoft “doesn’t have significant value” in a market where big franchises rule everything around us.

But what about Assassin’s Creed Shadows? Yep. That just dropped. And it wasn’t bad. It scored an 82 on Metacritic and drew 3 million players at launch. But even that wasn’t enough to lift the stock. Ubisoft recently reported a 52% drop in net bookings for Q3, and no amount of stealth kills or synchronized parkour can fix that overnight.

Plus, this deal doesn’t even finalize until late 2025… which means all this uncertainty gets to hang around like a weird coworker at happy hour until regulators say it’s cool.

So yes, even though Tencent just dropped a massive bag on Ubisoft, investors aren’t buying the “new chapter” hype. They see it as a rebrand wrapped in duct tape… a distraction of deeper problems. That’s why the stock is down 13%.

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Stock.News has positions in Microsoft.