Square Enix: Studio Sale Statement // Plans for New Studios – News

In its final financial report for fiscal year 2021/2022, Square Enix commented on the deal with Embracer Group for the sale of studios Crystal Dynamics, Eidos Montreal and mobile developer Square Enix Montreal, including associated IPs Tomb Raider, deus ex and Co.

In the corresponding presentation, a reason for the sale reappears, which Square Enix already mentioned in the press release at the time: investing in new fields such as blockchain, artificial intelligence and cloud technology. In addition, however, it was about optimizing the distribution of company resources in order to “develop appealing titles that are better tailored to the needs of our customers” and thus increase profits. That sounds a lot like: the studios weren’t profitable. This is entirely consistent with what the analyst said David Gibson by MST Financial that Square Enix lost over $200 million on its Marvel games. This is primarily due to the failed service game Marvel’s Avengers (in the test, grade 5.0) from Crystal Dynamics and not on Marvel’s Guardians of the Galaxy (In the test, grade 8.5) by Eidos Montreal – even if the latter also initially did not meet the sales expectations, according to the Narrative Director Mare DeMarle has found a growing audience since its release in Microsoft’s Gamepass.

The presentation goes on to say that Square Enix will now better coordinate global game releases with its Tokyo headquarters, including overhauling governance structures and communications. Going forward, Square Enix intends to make its role as a publisher more effective with a Chief Publishing Officer and accelerate decision-making through new internal group management. This should not only be about strengthening the existing brands, but also about establishing new ones. There are also plans to open new studios or to acquire them through mergers and takeovers in order to increase their own capacities for developing games. But that could also apply to mobile studios, since Square also has a strong presence in the mobile games sector.

Other interesting data from the report: Out of 279.6 billion yen (about 2 billion euros) in revenue from game sales, only about a tenth (27.2 billion) came from physical game sales. Elsewhere, merchandise sales rose from 9.4 to 14 billion yen (about 102 million euros). Among the major releases in the category are the collector’s editions of Final Fantasy 14 – Endwalker and Nier Replicant v1.22 (in the test, grade 9.0) counted.