Tencent Games has announced changes to its internal structure, including the creation of a new K9 Cooperation Department. This department will oversee strategic collaborations with Ubisoft, known for franchises such as Assassin’s Creed and Far Cry.

The K9 department will focus on publishing and IP collaborations, aiming to transform Ubisoft’s core IPs into long-term franchises.

The reorganization also sees the dissolution of the original UBI department, with its functions and teams integrated into the new K9 department.

In addition, Tencent has disbanded its Activision and EA departments. The functions and teams from the former Activision department will be absorbed into the STC game product and business departments. Similarly, the former EA department’s responsibilities and teams will merge into the domestic publishing line’s sports product and business departments, continuing to focus on existing products and core IP collaborations.

🔗 Source: 36Kr

🧠 Food for thought

1️⃣ Tencent deepens its strategic pivot toward Ubisoft amid industry consolidation

Tencent’s restructuring reflects a calculated deepening of its relationship with Ubisoft that began years ago when it helped the French publisher avoid a hostile takeover by Vivendi in 2018 by purchasing a 5% stake 1.

This reorganization follows Tencent’s March 2025 investment of €1.16 billion for a 25% stake in a new Ubisoft subsidiary focused on managing major franchises like Assassin’s Creed, Far Cry, and Rainbow Six 2.

The disbanding of Tencent’s partnerships with Activision and EA signals a strategic concentration of resources on fewer, more promising relationships rather than maintaining a broader portfolio of gaming partnerships 3.

This restructuring aligns with Tencent’s historical investment approach of acquiring stakes in companies at pivotal moments and then providing resources while maintaining strategic oversight, as demonstrated with past investments in companies like Riot Games and Epic Games 1.

The creation of the dedicated K9 Cooperation Department specifically for Ubisoft collaboration demonstrates Tencent’s commitment to transform these franchises into “evergreen” brands with long-term revenue potential.

2️⃣ Gaming industry’s “reset phase” drives strategic partnerships amid rising costs

Tencent’s organizational changes mirror broader industry restructuring, with the gaming sector experiencing approximately 35,000 layoffs from 2022 to 2025 as companies adapt to post-pandemic market stabilization 4.

The focus on developing “evergreen brands” from Ubisoft’s IP directly responds to market data showing only 15% of Steam players engaged with new releases in 2024, while live service games dominated consumer attention and spending 5.

Development costs for AAA games have surged beyond $200 million for major titles, making strategic partnerships increasingly necessary to share financial risk and maximize return on investment 5.

Recent Tencent developments