(Nov 21): Ubisoft Entertainment SA said it’s in breach of a loan agreement after auditors told the video-game publisher to delay recognising revenue from a recently signed partnership and forced the company to restate its 2025 fiscal accounts.
Auditors found that Ubisoft, the publisher behind Assassin’s Creed, had improperly booked sales from a partnership as revenue under international financial reporting standards, the company said on Friday. Their review also required the French publisher to postpone recognising some revenue tied to a deal signed in the second quarter of its 2026 fiscal year. The statement was released a week later than expected.
The changes put Ubisoft in violation of loan agreements as of Sept 30, which the company said it will address by early repayment of loans with an outstanding principal of about €286 million after a pending deal with Tencent Holdings Ltd closes.
The announcement caps a week of speculation about Ubisoft, which was scheduled to report its first-half results after market close on Nov 13. But the company delayed publication without explanation. A media briefing with Ubisoft’s chief financial officer Frederick Duguet was likewise cancelled. The company asked Euronext to halt trading of its shares and its bonds until the publication of its results.
Trading of its shares and bonds will resume at 10am in Paris, according to the company.
The company in March announced it would carve out a unit containing some of its most successful franchises including Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six. Vantage Studios formally begun operations last month and is now home to the franchises. Chinese gaming giant and existing Ubisoft backer Tencent said it would invest US$1.25 billion to acquire 25% of the venture. All conditions of that deal have been met and it is expected to close imminently, co-founder and chief executive officer Yves Guillemot said in the statement.
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Money from Tencent’s investment will be used to deleverage the group and support its strategic transformation, Ubisoft said. The company will present a new operating model in January.
Net debt was €1.42 billion as of Sept 30, of which €271 million related to the accounting restatement, according to the company.
Ubisoft reported bookings of €491 million in the second quarter, the company said, compared with Bloomberg-compiled estimates of €451 million. It sees net bookings in the third quarter, which ends in December, at around €305 million.
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Ubisoft has struggled to remain competitive in recent years, with high-profile games such as Avatar: Frontiers of Pandora and Star Wars Outlaws falling flat in an increasingly competitive consumer market. The company’s shares were down 48% from the beginning of the year to the trading suspension.
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