Square Enix is offloading some of its largest studios. According to Niko Partners analyst Daniel Ahmad, the publisher announced that it will sell Crystal Dynamics and Eidos to Embracer Group, a European megapublisher. This will enable Square to reclaim these less-profitable teams off its books. This is particularly important during a costly reloading phase for Crystal Dynamics and Eidos.
Square Enixs western studios have broken out across triple-A games based on owned IP and more recently licensed IP like Marvel, according to GamesBeat. Embracer Group is likely to pay more than $300 million in the short term.
But what will happen next for Square Enix? In a note to investors, the publisher reiterated what Ahmad said. Getting rid of Crystal Dynamics and Eidos frees up resources for more profitable projects. Square also believes that it will instead pursue blockchain, AI, and the cloud. Again, the company believes that these areas will increase its net income.
According to Ahmad, Square Enix intends to leverage its revenues to streamline its game business and invest in its core development teams in Japan, as well as future trend areas such as cloud, AI, and Blockchain. This was previously mentioned as a primary focus over the future.
Square Enix is firmly committed to developing technology, as it is possible. Blockchain is becoming more popular with investors, and perhaps the publisher''s leadership wants to capture some of that tension. However, Dr. Serkan Toto, a Tokyo-based consultant, believes Square Enix is serious about his interest in emerging technologies.
I believe that they will really invest in the blockchain and metaverse space. But their president has revealed this move enough times now, according to Toto.
In a New Years letter, Square Enix president Yosuke Matsuda disclosed that the company is considering blockchain and NFTs.
Permettez-to, that they will focus more on high-quality Japanese games that are exported to the rest of the world.
Square Enixs'' Japanese efforts have however failed to compete with Crystal Dynamics or Eidos. Those teams and partnerships have produced critical panned products like Balan Wonderworld, The Quiet Man, Left Alive, and Babylons Fall.
Perhaps Square Enix can reinvest in quality now that it isn''t splitting its focus as much.