Ubisoft shares reversed gains in afternoon trade on Friday after rising as much as 12% earlier on plans to set up a subsidiary to house three of its popular video game franchises.

Ubisoft is spinning off some of its top franchises, including "Assassin’s Creed," "Far Cry" and "Rainbow Six," into a new subsidiary funded by Tencent.

Ubisoft now officially has a €1.16 billion life jacket from Tencent, but it comes with the cost of a few beloved IPs and the risk of layoffs.

Ubisoft and Tencent are working together on a new gaming subsidiary that includes Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six.

Assassin's Creed maker Ubisoft is creating a new unit with China's Tencent to handle its most popular franchises, including Assassin's Creed, Far Cry and Rainbow Six. The new unit will be worth more than $4 billion.

Ubsioft will spin off its most successful game franchises, including Assassin’s Creed, Far Cry, and Rainbow Six Siege, into a separate subsidiary thanks to a $1.25 billion investment from Chinese conglomerate Tencent.

Tencent's investment in the new subsidiary values it at €4 billion, implying a four-times multiple based on its average sales from full-year 2023 to 2025. When this article was published, the new carveout from Ubisoft didn't have a name yet. According to Reuters, Ubisoft stock has risen 10% after Tencent's investment in the new subsidiary.

Tencent has invested $1.25 billion in a new Ubisoft operating division that includes the core games Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six brands. Ubisoft, the French video game giant that has struggled to launch hits until its most-recent launch of Assassin’s Creed: Shadows,