Square Enix sells its western studios and IP to Embracer Group

[Talk Show Host]

Matsuda, on TR "failed" launch period of 3,9m copies, 4 years ago:

 

Quote

I say this with the benefit of hindsight now, but at the time our numbers leading up to the release of Tomb Raider had been very poor and I think our people were probably banking on that and wondering how much it was going to help our final earnings. In the end, it didn’t quite sell as much as we had anticipated.” It wasn’t that Tomb Raider‘s performance, in a vacuum, was weak; it’s that it didn’t do well enough to turn around the entire company.

 

🙄

[Broker]

1 hour ago, Talk Show Host said:

 

The last 3 TR games have sold more than 38m copies and the last two Deus Ex more than 12m. 

 

I'd say "consistently underperforming" is way off the mark.

Yeah that was probably unfair. I guess it’s in comparison to the big hitters. 12m is what Elden Ring sold in the first month, it’s about average for an AC game as well. I get that it’s fine for lifetime sales if you’re a medium sized developer, but for the amount that AAA games cost it’s not enough to be a big hit. And I’m pretty sure there was also a decline over the new TR series, not sure how Mankind Divided did compared to Human Revolution. 
 

I’d say personally though, these studios create games which live in a weird middle ground. They’re not unusual or interesting enough to be cult hits with passionate fanbases, but they’re not slick enough to be mainstream megahits. The TR games are weird, obsessed with delivering their painfully mediocre and generic stories, with cookie cutter gameplay. DE is much more to my taste, but I never quite feel like they’ve committed to being an immersive sim or an action game. They’re developers who make 6 or 7 out of 10 games that are fine. 

[Talk Show Host]

10 minutes ago, Broker said:

Yeah that was probably unfair. I guess it’s in comparison to the big hitters. 12m is what Elden Ring sold in the first month, it’s about average for an AC game as well. I get that it’s fine for lifetime sales if you’re a medium sized developer, but for the amount that AAA games cost it’s not enough to be a big hit. And I’m pretty sure there was also a decline over the new TR series, not sure how Mankind Divided did compared to Human Revolution. 
 

I’d say personally though, these studios create games which live in a weird middle ground. They’re not unusual or interesting enough to be cult hits with passionate fanbases, but they’re not slick enough to be mainstream megahits. The TR games are weird, obsessed with delivering their painfully mediocre and generic stories, with cookie cutter gameplay. DE is much more to my taste, but I never quite feel like they’ve committed to being an immersive sim or an action game. They’re developers who make 6 or 7 out of 10 games that are fine. 

 

 

Yeah, can't say I disagree, especially on what you say about TR. It just seems that they have done quite good and I really think a western developer wouldn't just get rid of them because they are not... perfoming well.

 

It just seems that the price is low for the portfolio and the inclusion of studios like Crystal Dynamics. In a way it seems like they thought these series should be selling tens of millions per title, which is way too unrealistic. 

 

I think they have simply decided to stop competing in the western AAA market, which frankly I don't find it crazy at all.

 

 

[Mr. Gerbik]

 

 

[deerokus]

4 hours ago, Broker said:

Yeah that was probably unfair. I guess it’s in comparison to the big hitters. 12m is what Elden Ring sold in the first month, it’s about average for an AC game as well. I get that it’s fine for lifetime sales if you’re a medium sized developer, but for the amount that AAA games cost it’s not enough to be a big hit. And I’m pretty sure there was also a decline over the new TR series, not sure how Mankind Divided did compared to Human Revolution. 
 

I’d say personally though, these studios create games which live in a weird middle ground. They’re not unusual or interesting enough to be cult hits with passionate fanbases, but they’re not slick enough to be mainstream megahits. The TR games are weird, obsessed with delivering their painfully mediocre and generic stories, with cookie cutter gameplay. DE is much more to my taste, but I never quite feel like they’ve committed to being an immersive sim or an action game. They’re developers who make 6 or 7 out of 10 games that are fine. 

Keep in mind square are horrible at marketing their western stuff. Those exact same games would be bigger hits from Sony or Ubisoft or whoever. That's why it's good they're out of there now. Guardians of the Galaxy is real good but it's tainted with the avengers stink and se had no idea how to market it. Being unable to sell marvel games is... impressive?

 

Hopefully someone buys Konami next.

[Broker]

I guess we don’t know how many of the choices made on the Avengers and Guardians games were made by SE and how many the developers had control over. The Avengers game is an absolute shitshow, it’s not just the marketing at fault there. 

[moosegrinder]

I'd put Bollocks (capital B) on everything that's wrong with Avengers being on the suits, be it Marvel or Squeenix. I don't see how anyone gives a developer with no live service experience a license like that and expects it to go well. It's not like they have a raft of developers like Activision do to pick up the slack in relevant areas like they do on CoD.

 

And if they do and I'm being pretty myopic it's obvious that Square have absolutely no idea how to utilise the talent that they have with regard to Western games.

 

It's odd that this gets my knickers in a twist as much as it does. I don't have any particular investment in any of their games. Maybe it's because they squander so much potential.

[deerokus]

1 hour ago, Broker said:

I guess we don’t know how many of the choices made on the Avengers and Guardians games were made by SE and how many the developers had control over. The Avengers game is an absolute shitshow, it’s not just the marketing at fault there. 

Guardians isn't however most people understandably assume it is because of Avengers.

[RubberJohnny]

16 hours ago, Talk Show Host said:

Matsuda, on TR "failed" launch period of 3,9m copies, 4 years ago:

 

🙄

What’s crazy is they had loads of Japanese flops and I never saw a post like that from any of the executives: Balan Wonderworld, Babylons Fall, Stranger in Paradise, etc.

 

If not outright nationalism, it’s a level of favouritism that would make Denethor blush.

[Captain Kelsten]

16 hours ago, Talk Show Host said:

 

The last 3 TR games have sold more than 38m copies and the last two Deus Ex more than 12m. 

 

I'd say "consistently underperforming" is way off the mark.

88 million units of Tomb Raider sold since the series started in 1996 seems unbelievably low, doesn’t it? For a game that changed the landscape and introduced a gaming icon, 88 million across every single game, 38 million of that being since the reboot, seems like tiny numbers. 

[deerokus]

27 minutes ago, Doctor Shark said:

88 million units of Tomb Raider sold since the series started in 1996 seems unbelievably low, doesn’t it? For a game that changed the landscape and introduced a gaming icon, 88 million across every single game, 38 million of that being since the reboot, seems like tiny numbers. 

Eh it's basically the same figures as Dragon Quest.

[Siri]

57 minutes ago, RubberJohnny said:

What’s crazy is they had loads of Japanese flops and I never saw a post like that from any of the executives: Balan Wonderworld, Babylons Fall, Stranger in Paradise, etc.

 

If not outright nationalism, it’s a level of favouritism that would make Denethor blush.

 

While I do agree that Square-Enix have been pumping out awful shite from their Eastern branches,  it's worth noting that none of those games had deals with Marvel strapped to them, and I'd imagine that affects the optics of how their board perceives sales from the Eidos branch of the family.

 

Not that I considered chasing the GaaS train was a very good option from the off, but still.

 

Speaking of ill thought out GaaS, At least this sale means another traditional Blood Omen game might see the light of day.

[Jg15]

11 hours ago, Broker said:

I guess we don’t know how many of the choices made on the Avengers and Guardians games were made by SE and how many the developers had control over. The Avengers game is an absolute shitshow, it’s not just the marketing at fault there. 

Avengers is truly shocking. You would have thought by now, over 18 months since it released, they would have turned things around some what. It felt like they were holding on until the woeful "exclusive" Spiderman DLC was released (as they were contractually obliged by Sony) and now the game is on life support.

 

Will the game continue under SE, or will it finally be cut loose once its developers are sold off? I'm betting on the latter.

[thesnwmn]

51 minutes ago, Doctor Shark said:

88 million units of Tomb Raider sold since the series started in 1996 seems unbelievably low, doesn’t it? For a game that changed the landscape and introduced a gaming icon, 88 million across every single game, 38 million of that being since the reboot, seems like tiny numbers. 

 

I guess one thing is that the market was much smaller in 1996 when Tomb Raider was released. 10 million Playstations sold by the end of that year. And then it was a sequel every year so how many people actually buy the original one rather than the next (although 2 and 3 sold similar numbers).

 

But I also think this is where gamers like us* are terrible at understanding the market and what's actually successful. Yes Lara Croft was launched off the back of the series but that doesn't need people to be playing the games, just talking about the character (boobs in a game *snicker*). Look at how few people here are playing the really popular non-Nintendo stuff in gaming today. Fortnite, CoD, LoL, FIFA, etc. Of course we have members who play them, some all the time as background, others on release, but these are just part of our gaming landscape, not the majority of it. We are fundamentally not the gaming market for the most part.

 

It's why most of our desired remakes are so unlikely. The franchises we think of as "big" or "important" from the 80s, 90s and 00s are just nothing. They'd gain a tiny bit of traction from their previous existence but likely as much shit flung at them when their original is changed in any way and we get all upset over it.

 

* the hardcore or those interested in it for a long time and reading about it as much as we play

[Captain Kelsten]

Good point, well made. 

[bear]

This whole deal just seems like a very odd move by Square. Does it really make them more attractive for a buyout? They reduced their headcount but it also seems like they've reduced the variety in what they produce. If the big players are Tencent, Sony and MS then are Square now a more attractive proposition for any of those companies? 

 

As someone who just plays games its probably good news as Embracer seem to have some sort of plan for their future even if it just ends up being that they want to have a load of stuff to stick into PS Plus/ GamePass and get paid that way. Its hard to know what Square are at really. 

[Rorschach]

I guess this means they're definitely not making any more Marvel games, then. Which although I liked GotG, is probably for the best.

 

I wonder if they'll be allowed to work on something wholly original. Seems unlikely, I doubt Embracer have paid $300m for the talent.

[Majora]

There are rumours that Sony are looking to acquire Square-Enix and that this could make it easier for such a deal to take place but I'm struggling to see what real benefit Sony would derive from such an acquisition.

 

Square-Enix already massively prioritise Sony platforms over Microsoft's and if you're a JRPG fan then you most likely already own a PlayStation anyway since Xbox is not particularly as a great home for JRPGs in the first place. Sony wouldn't really be getting that much in the way of exclusivity or new games from Square-Enix than they're already getting.

 

It might be a minor hit to Nintendo as they have gotten some exclusive games out of Square-Enix but they're rather niche and small-scale in the scheme of things. Not games that move the needle in any significant way.

 

Will be interesting to see how it all pans out anyway. Perhaps the value is moreso in owning the IP and potential wider implications of that (leveraging it in other forms of media etc) than obtaining exclusivity of games they already largely get either timed or full exclusivity of anyway.

[Flanders]

2 hours ago, Majora said:

There are rumours that Sony are looking to acquire Square-Enix and that this could make it easier for such a deal to take place but I'm struggling to see what real benefit Sony would derive from such an acquisition.

 

Square-Enix already massively prioritise Sony platforms over Microsoft's and if you're a JRPG fan then you most likely already own a PlayStation anyway since Xbox is not particularly as a great home for JRPGs in the first place. Sony wouldn't really be getting that much in the way of exclusivity or new games from Square-Enix than they're already getting.

 

It might be a minor hit to Nintendo as they have gotten some exclusive games out of Square-Enix but they're rather niche and small-scale in the scheme of things. Not games that move the needle in any significant way.

 

Will be interesting to see how it all pans out anyway. Perhaps the value is moreso in owning the IP and potential wider implications of that (leveraging it in other forms of media etc) than obtaining exclusivity of games they already largely get either timed or full exclusivity of anyway.

1 - Defensive move, stops Microsoft from buying them and making all their games exclusive to Game Pass.

 

2 - GAAS expansion with ownership of FF14. Sony would go from virtually no presence in the space to owning two of the most popular and long-running IPs between this and Destiny. 
 

3 - Restrengthens Japan position. Square would essentially become the new Sony Japan software division, replacing the cuts they’ve made there with a group that makes successful games every now and again.

 

And probably some extra benefits for mobile stuff as well. 

[footle]

9 minutes ago, Flanders said:

1 - Defensive move, stops Microsoft from buying them and making all their games exclusive to Game Pass.

 

2 - GAAS expansion with ownership of FF14. Sony would go from virtually no presence in the space to owning two of the most popular and long-running IPs between this and Destiny. 
 

3 - Restrengthens Japan position. Square would essentially become the new Sony Japan software division, replacing the cuts they’ve made there with a group that makes successful games every now and again.

 

And probably some extra benefits for mobile stuff as well. 

this.

[Majora]

I honestly doubt Microsoft would even attempt to buy Square-Enix. Can't see it ever happening. Good points on the rest though.

[deerokus]

19 minutes ago, Majora said:

I honestly doubt Microsoft would even attempt to buy Square-Enix. Can't see it ever happening. Good points on the rest though.

Embracer themselves might look like a juicy pickup further down the line though.

[Captain Kelsten]

In a Doctor Strange-esque vision of the future, I can see Microsoft buying everything up purely so they have no one to challenge them when the relaunch GAMES FOR WINDOWS LIVE

 

[Mr. Gerbik]

3 hours ago, Flanders said:

- Defensive move, stops Microsoft from buying them and making all their games exclusive to Game Pass.

The other points, yes. But this one? Until Microsoft is able to buy a single Japanese studio, nevermind an entire publisher, we have to assume that they're unable to. They've been trying since the OG Xbox days.

[Quest]

28 minutes ago, Mr. Gerbik said:

Until Microsoft is able to buy a single Japanese studio

 

Don't they own Tango Gameworks now? 

[Mr. Gerbik]

21 minutes ago, Quest said:

 

Don't they own Tango Gameworks now? 

Ha, that's a technicality I guess. They bought Bethesda, Tango came with them. I don't think they've been able to directly buy a Japanese dev studio yet.

[Quest]

They should just get Bethesda to buy them all the Japanese devs then, like teenagers hanging around the off licence trying to get someone to buy them beer.

[LaveDisco]

Microsoft don't (yet) know how to manage western game studios, they're not going to be able to manage Japanese ones. They might do it, but it'll be a mistake. 

 

And they are taking on enough terrible behaviour with Activision, without owning becoming liable for terrible working conditions of Japan - that are bound to come to light sooner rather than later.

[Azrael]

Embracer Group? I can't keep up with all these global conglomerates. 

[Talk Show Host]

22 hours ago, Flanders said:

1 - Defensive move, stops Microsoft from buying them and making all their games exclusive to Game Pass.

 

2 - GAAS expansion with ownership of FF14. Sony would go from virtually no presence in the space to owning two of the most popular and long-running IPs between this and Destiny. 
 

3 - Restrengthens Japan position. Square would essentially become the new Sony Japan software division, replacing the cuts they’ve made there with a group that makes successful games every now and again.

 

And probably some extra benefits for mobile stuff as well. 

I highly doubt Sony is in a position to spend 3-5 billion just as a defensive move. On the other hand, they already own 18,6% of the company, don’t they?