Ubisoft Just Admitted to a Massive Accounting Error, but Sugar Daddy Tencent Is Footing the Bill
The big secret is out: Ubisoft didn't halt trading for a victory lap. They halted it because their accountant forgot how to do math (or did it a little too creatively).
The suspense is finally over, and the reality is somehow both boring and terrifying. Ubisoft finally admitted why they yanked the emergency brake on their stock trading earlier this week.
It wasn't a secret buyout. It wasn't a surprise game drop. It was the auditors finding a massive screw-up in the books.
Ubisoft officially announced that they are in "breach of a loan agreement." Auditors discovered that the company improperly booked sales from a partnership as revenue way too early. Because of this accounting "whoopsie," they have to restate their 2025 fiscal accounts and postpone recognizing revenue for a 2026 deal.
The Billion-Euro Safety Net
In normal circumstances, defaulting on a loan agreement because you messed up your math is a death sentence. It means the banks come for the keys to the office.
But Ubisoft has an ace in the hole, and its name is Tencent.
Just as the bad news dropped, Ubisoft confirmed that the deal to sell 25% of "Vantage Studios", the new home of Assassin's Creed and Far Cry, to Tencent is closing "imminently."
That deal is worth $1.25 billion.
Ubisoft is going to take that massive injection of Chinese cash, pay off the €286 million in loans they are currently in trouble for, and try to pretend this week never happened. They are literally deleveraging the company with Tencent's wallet.
It’s Not Malice, It’s Just Incompetence
Let's be fair for a second. As much as I love a conspiracy, this probably isn't fraud. Accounting errors happen. It’s likely just a disagreement on when a signed contract actually counts as "money in the bank."
It is technically just human error. But my god, the timing.
To have this blow up right now? When the stock is down 48% year-to-date? When Star Wars Outlaws underperformed? It proves that Ubisoft currently has the absolute worst luck in the gaming industry. They cannot catch a break, even from their own accountants.
The Market Shrugs
The stock market did exactly what you’d expect. It nose-dived 5.6% when the news broke, realized Tencent was writing a check to fix it, and then bounced back up 3%.
So, Ubisoft survives another day. They aren't bankrupt, and they haven't been fully bought out yet. They’re just embarrassed, slightly poorer in equity, and heavily indebted to their partners at Tencent.
Business as usual, I guess. Now, can we please get back to fixing Assassin's Creed?
Credit to Bloomberg.