Square Enix has announced that the company is letting go of its so-called “slow-performing” franchises and studios. The company has entered an agreement with The Embracer Group which has been buying up studios and franchises for a while now. They recently acquired THQ Nordic and Gearbox. The Embracer Group is now adding Crystal Dynamics, Eidos Montreal and Square Enix Montreal to their belt.
While the purchase isn’t final just yet, the two companies have already entered an “agreement to acquire” which means it is just a matter of time before things get signed off. The total cost of this deal is sitting at $300 million.
After the sale is completed and the check is signed, The Embracer Group will then officially own studios including Crystal Dynamics, Eidos Montreal and Square Enix Montreal. Over 1100 employees will then work for The Embracer Group instead of Square Enix.
The group will also gain rights to a catalogue of IPs including Deus Ex, Tomb Raider, Thief, The Legacy of Kain and other active projects that fall under these current studios.
Square Enix says that the sale happened after the company decided to shift its focus towards Japanese studios instead of its Western ones. This has been a long time coming though. Square Enix revealed a few weeks back that its Western Studios weren’t performing as well as the company hoped.
Square Enix has had a tough run in recent years with some titles. Even though they performed reasonably well, the company doesn’t think that is the case. The company has constantly been referring to game releases as titles that had “underperformed”. The Embracer Group aims to grow these studios and IPs. In a statement, they said:
The acquisition brings a compelling pipeline of new installments from beloved franchises and original IPs, 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 IP, 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 Transaction will assist the Company in adapting to the changes underway in the global business environment by establishing a more efficient allocation of resources, which will enhance corporate value by accelerating growth in the Company’s core businesses in the digital entertainment domain. In addition, the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.