Embracer Group announces the signing of a takeover project with Square Enix to take over its Western branch. This includes major licenses like Tomb Raider, Deus Ex, Legacy of Kain or even Thief.
You could smell the operation for several years. The Japanese branch of Square Enix has found its colors with Final Fantasy, Dragon Quest, Kingdom Hearts or even Nier. The Western branch, it has rather brought together several failures with in particular Avengers, from Crystal Dynamics. If in detail, we can remember that the management of the project necessarily comes down to Japanese management, the fact remains that the two branches of the groups no longer seemed in harmony.
Impossible to foresee a takeover of all of Square Enix, too big for many groups, but a resale of the Western branch was possible. Contrary to what one could predict, it is not Microsoft, yet very close to Crystal Dynamics, but rather the Embracer group.
Cult licenses
The Embracer group therefore announces the acquisition of Crystal Dynamics, Eidos-Montreal, Square Enix Montreal and all the licenses attached to these studios, including the historic Tomb Raider, but also licenses less used by Square Enix in recent years, such as Legacy Of Kain, Thief or even Deus Ex. In all, there are 50 games for which Embracer now owns the publishing rights, as well as a workforce of 1100 employees.
The buyout amount negotiated by Square Enix may seem quite small: $300 million. This is a little less than the 315 million invested by EA to buy the only Respawn Entertainment studio and its Titanfall license.
It should be noted that the publishing arm of Square Enix is not part of the takeover. The Outriders, Life is Strange and Just Cause licenses therefore remain the property of Square Enix.
Who is Embrace?
We have already talked about Embracer Group on Frandroid several times. This European investment group has embarked on a major series of studio takeovers over the past few years. In particular, he bought Gearbox at the start of 2021. At the end of that same year, Embracer announced that it wanted to buy 35 studios in a single year. A major specialist in publishers and developers of AA games, the group has also extended its finances to AAA game studios, that is to say the largest development budgets in video games.
With the acquisition of the Western branch, it is precisely several studios specializing in AAA games on which Embracer gets its hands. Crystal Dynamics recently announced the start of a new Tomb Raider project with Unreal Engine 5.
What about the Japanese branch of Square Enix?
Once the takeover is closed, Square Enix will therefore evolve without its Western branch. However, we are talking about a branch in place since the 2000s, with the acquisition of Eidos Interactive in 2009. We can now wonder if this reduced Square Enix could be chewed in turn.
Nothing allows us to imagine it for the moment, but with this reduced size, the Japanese publisher is perhaps becoming much closer to the criteria of Sony, its long-time partner for which it still develops many exclusive PlayStation games.
In its press release, Square Enix highlights its upcoming investments in new technologies such as blockchain, AI or the cloud. Investments made possible thanks to the 300 million dollars recovered by the resale.
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