Earlier this year, in May, Square Enix shockingly sold off its western studios to Sweden’s Embracer Group for a meager $300 million. A valuation far lower than even what a layperson would expect. Eidos Montreal’s founder says the reason for this sudden sale was because Square Enix was readying itself to be bought out by Sony, he said in an interview with GamesIndustry.
This sale of the western studios included Eidos Interactive, Crystal Dynamics, and Square Enix Montreal, all massive contributors to the gaming landscape as we see it today. In a dumbfounding decision, Square Enix also transferred all intellectual property as well; this includes Deus Ex, Legacy of Kain, and even a franchise as massive as Tomb Raider.
Founder of Eidos Montreal Stephane D’Astous believes Square Enix Japan was never as committed to its western studios as one would hope. And funding for games such as Avengers and Tomb Raider was limited, D’Astous said:
If I read between the lines, Square Enix Japan was not as committed as we hoped initially. And there are rumors, obviously, that with all these activities of mergers and acquisitions, Sony would really like to have Square Enix within their wheelhouse. I heard rumors that Sony said they’re really interested in Square Enix Tokyo, but not the rest. So, I think [Square Enix CEO Yosuke] Matsuda-san put it like a garage sale.
D’Astous compared the sale of the western studios with the sale of Gearbox, which sold for $1.3 billion. He said:
They have about 1,000 staff. Eidos has about 1,000. They have basically Borderlands and others, and Eidos has five times the IPs. So why four times less? I guess there weren’t a lot of key people interested. And it shows the health of the value of the potential of Eidos, unfortunately.
Why Would Sony Buy Square Enix?
Microsoft is the biggest reason for this possibility; the acquisition of Bethesda and Activision Blizzard set the cogs in motion for this race of acquisitions. Both companies were some of the biggest players in the entire industry, so in retaliation to the skyrocketing competition, Sony is definitely in the market for a merger or two.
Since mergers are always kept secret, word of Sony looking for acquisitions is probably in every major video game development studio on the planet. Previously believed that Capcom might be the first to be bought out after Sony’s temporary partnership with the company for Street Fighter V. That, too, seems unlikely now as the sequel, Street Fighter 6, is making it to Microsoft’s consoles as well.