Square Enix Selling Off Western Companies

The collection of studios represents a world-class creative team of approximately 1,100 employees across three studios and eight global locations, including two of the most reputable AAA studios across the industry in Crystal Dynamics and Eidos Montreal. The studios possess a unique ability to deliver blockbuster hits decade after decade. The acquisition brings a compelling pipeline of new installments from beloved franchises and original intellectual property, including a new Tomb Raider game. The acquisition builds on Embracer’s mission of creating a leading independent global gaming and entertainment ecosystem. Embracer has been particularly impressed by the studios’ rich portfolio of original intellectual property, housing brands with proven global potential such as Tomb Raider and Deus Ex, as well as demonstrating the ability to create AAA games with large and growing fan bases. There are compelling opportunities to organically grow the studios to maximize their commercial opportunities.

The portfolio of intellectual property consists of iconic franchises appreciated by critics and players alike. For example, two original intellectual property, Tomb Raider and Deus Ex, have sold AAA units of approximately 88 million and approximately 12 million, respectively. Embracer sees an opportunity to invest in these franchises, as well as the additional acquired intellectual property such as Legacy of Kain, Thief, and other original franchises. The acquisition also includes the continued sales and operations of the studios’ more than 50 back-catalogue games.

Founded in 1992, Crystal Dynamics consists of almost 300 employees across San Mateo, California; Bellevue, Washington; and Austin, Texas. The studio is committed to creating narrative-focused AAA action–adventure games and is led by 30-plus year veteran Scot Amos. Prior AAA releases from the studio include Rise of the Tomb Raider and Legacy of Kain Defiance. Crystal Dynamics is actively working on several AAA projects, including the next mainline Tomb Raider game that will deliver next-generation storytelling and gameplay experiences.

Founded in 2007, Eidos Montreal consists of almost 500[1] employees across Montreal, Canada; Sherbrooke, Canada; and Shanghai, China. The studio focuses on creating memorable AAA experiences focused on unique stories and strong characters within the action-adventure and RPG genres. The studio is led by David Anfossi, who has 26 years of industry experience. Prior AAA releases include Thief 4, Deus Ex Human Revolution, and Shadow of the Tomb Raider. The studio is working on a host of AAA projects including both new releases from beloved franchises and original intellectual property.

Founded in 2011, Square Enix Montreal consists of almost 150 employees across Montreal, Canada and London, UK. The studio focuses on building mobile games that players will want to return to for years to come. The studio is led by Patrick Naud, who has 24 years of industry experience. The studio is uniquely talented in creating mobile experiences based on traditionally PC and Console intellectual property such as Hitman, Tomb Raider, and Deus Ex. The studio will continue to develop and operate memorable mobile games based on AAA intellectual property.

After closing this transaction, the US will be Embracer’s #1 country by number of game developers and Canada will be #2. In total, post pending closings, Embracer will have more than 14,000 employees, 10,000 engaged game developers, and 124 internal studios. Embracer’s upcoming content pipeline includes more than 230 games with more than 30 AAA games. This acquisition will bring additional scale to Embracer’s current AAA segment, and Embracer will have one of the largest pipelines of PC and Console games content across the industry, across all genres. As Embracer’s pipeline matures, this will be a key driver for organic growth in net sales, operational EBIT, and free cash flow.

Currently, Embracer’s development resources are fully utilized either by ongoing internal development projects or by projects financed by external publishers. Embracer’s teams dedicated to work-for-hire services to external studios and publishers are also fully utilized across all territories. The lack of available resources in the industry and demand for these services exceeds our available capacity. Through this acquisition, Embracer will augment its development capabilities specifically within the AAA segment, which will provide opportunities to accelerate organic growth.

Embracer believes there will be an increasingly strong demand for high-quality content, including AAA single-player games, over the decade. We aim to continue working with leading platforms and license holders and to form deeper strategic relationships with a handful of leading companies in the industry. Furthermore, synergies across Embracer’s ecosystem benefit our people and companies. Our approach is that quality comes first in games development, which is why we believe our decentralized operating model of empowering management teams while facilitating synergies positions Embracer for sustainable long-term success.

Ironically this probably puts SE as a more attractive prospect to purchase, from a strictly profit based perspective.

Have we got enough cash between us now to buy out S-E and force a new FFXI expansion?
.

Obviously they needed that money because a large portion of it is going into FFXI development for the next generation of expansions.

I mean, c'mon now.

Just sell FFXI and change the name Initial Fantasy Online

If SE is bought out by either of the big two ( Sony, Microsoft ), shutting the company's least profitable content down would be a top priority.

Real talk, I'm not opposed to that lol...

Just sell FFXI and change the name Initial Fantasy Online

NOOOOOOOOOOOOOOOOO They sold Tomb Raider. ; ;

Oh well, SE's portrayal of Indigenous Inuit is inaccurate anyway.

Square Enix this week sold its Western studios - Crystal Dynamics, Eidos Montreal, and Square Enix Montreal - for $300 million to Embracer Group. The sale includes over 50 IPs like Tomb Raider, Deus Ex, Thief, Legacy of Kain, and many more.

$300 million for those studios and IPs compared to other recent acquisitions seems like a a steal for Embracer Group, however, it appears this could be due to the losses Square Enix incurred with some recent releases.

Industry analyst David Gibson via Twitter reports that Square Enix lost $200 million on the two Marvel games - Marvel’s Avengers and Marvel’s Guardians of the Galaxy.

Marvel - that’s the reason why Square sold its NA team for $300m," said Gibson. "Because in a little under two years they lost $200m on two Marvel games. But it still looks like a low price given the optionality on probably 4 AAA titles coming through."

Guardians was a good game, it undersold and cost a shitload to make. Deus Ex is dead. Hitman is on life support. The market for single player games isn't as large as it used to be. And the appetite to pay full price for them is even smaller.