It was confirmed today, (Monday, May 2nd,) by Square-Enix, that the Japanese publisher will sell all three of its Western gaming studios. Crystal Dynamics, Eidos Montreal, and Square-Enix Montreal will be acquired by Embracer Group. The huge corporation will also acquire all of the IPs developed by those developers and the staff members employed by the three teams.
Square Enix America and Europe’s CEO, Phil Rogers, had this to say regarding the deal;
Embracer is the best kept secret in gaming: a massive, decentralized collection of entrepreneurs whom we are thrilled to become a part of today. It is the perfect fit for our ambitions: make high-quality games, with great people, sustainably, and grow our existing franchises to their best versions ever. Embracer allows us to forge new partnerships across all media to maximize our franchises’ potential and live our dreams of making extraordinary entertainment.
All three of the studios were owned in their entirety by Square Enix prior to this deal. The cumulative staff body of the three teams is around 1,100 people. The total cost of the purchase is around 300 million dollars.
Some of the most notable IPs that Embracer will acquire include; Tomb Raider, Deus Ex, and Legacy of Kain, along with a library of “over 50 games.” Square Enix’s announcement also indicated that its other studios “will continue to publish franchises such as Just Cause, Outriders, and Life is Strange.”
The past few years has seen an increasing number of independent studios be gobbled up by large corporations as part of what is being called The War Of Acquisitions. Whilst these past deals have mostly been received negatively, this one may be a different story.
Unlike the studios that Microsoft and Sony have acquired recently, Square Enix has been accused of wasting their IPs by many gamers online. Certain popular franchises have lay dormant for years and some of the publisher’s more recent efforts have not been received well by critics.
Embracer have spent the past few years subtly building an impressive stable of IP, the majority of which are developed in Europe. This is largely due to Embracer acquiring the rights to THQ Nordic back in 2014. The iconic mid-tier developer had its heyday in the mod 2000’s, but could not keep up when the mid-tier fell away.
Embracer kept the company name, adding “Nordic,” to the end of it. Although it is interesting to note that Embracer Group did not acquire the rights to every THQ game. This recent deal has echoes of that THQ deal, as again not all of Square Enix’s titles will be acquired by Embracer.
This is not Embracer only notable deal as of late. In the last year, they have purchased both the video game studio, Gearbox Software and popular board game maker, Asmodee Games.
Arguably the most surprising part of this announcement is the low price that Embracer paid for the Square Enix licenses. The total combined cost of the Gearbox and Asmodee acquisitions exceeds 1 billion dollars. The cost of the Square Enix acquisition doesn’t even come close to that figure.
Part of the reason that this figure is so surprising is owed to the fact that Square-Enix announced that the lifetime sales of the Tomb Raider games had exceeded 85 million as recently as October 2021.
Another interesting aspect of this deal to consider is the idea that Embracer are likely to also acquire the rights to the Tomb Raider movie franchise, given that they are set to acquire the entire IP. With that said, neither Embracer or Square Enix have given confirmation on whether the rumoured sequel to 2018’s Tomb Raider movie is still in the pipeline.
These large scale acquisitions usually follow a fumble from the smaller company. For Square Enix, this was the recent Marvel’s Avengers. When that title launched in 2020, it fell drastically short both critically and commercially. Whilst 2021’s Marvel’s Guardians of the Galaxy game, developed by Eidos Montreal, was received well critically, its financial performance was poor. Those two back-to-back disappointments, along with radio silence regarding a new Deus Ex title, was evidently enough to put the nail in the coffin of those western Square Enix studios.
Lars Wingefors, who is the Co-founder and Group CEO of Embracer Group, had this to say regarding the acquisition;
We are thrilled to welcome these studios into the Embracer Group. We recognize the fantastic IP, world class creative talent, and track record of excellence that have been demonstrated time and again over the past decades. It has been a great pleasure meeting the leadership teams and discussing future plans for how they can realize their ambitions and become a great part of Embracer.
Elsewhere in Embracer’s announcement of the deal, it gave confirmation that the team has already begun development on what will become, “the next mainline Tomb Raider game.” This new entry in the iconic franchise will apparently feature, “next-generation storytelling and gameplay experiences.”
As if that wasn’t enough, not long after the announcement was made public, Eidos Montreal gave confirmation that its next major project will be set within the universe of Deus Ex. The news was given via an Embracer conference call.
What do you make of the recent announcement? Do you see this deal in a positive light, or is it just another example of consolidation within the gaming industry? Let us know in the comments section below, or hit me up on Twitter.