Square Enix surprised gamers after they outright sold two of their biggest Western studios earlier this year. Namely, Crystal Dynamics and Eidos, they are the developers behind Tomb Raider and the modern Deus Ex titles respectively.
The studios were acquired by Embracer Group, making the Swedish company one of the biggest publishers in all of Europe.
A recent internal conference call at Square Enix has revealed more information on this decision, courtesy of analyst David Gibson.
For one, it was revealed that the Japanese gaming behemoth chose to sell off Crystal Dynamics and Eidos due to fears that they were eclipsing the popularity of their in-house Japanese games.
There is more: they are also looking to sell stakes in their studios to ease resources, likely to allocate them towards the development of IPs they deem relevant.
What does this mean for Square Enix?
This is part of a "Phase 2" push to diversify the capital structure for many of their studios. If this comes to fruition, it will leave many third-party companies open to investing in Square Enix i.e., they will have other investors helping out with the rising costs of game development.
With next-gen games being bigger and better than ever before, they also need equally big financial backing to be realized. In fact, it is suggested that current costs hover around the USD $840 million mark.
So, which studios could possibly jump at this opportunity? Gibson suggests Sony and Tencent are the likely candidates.
Sony is no stranger to expading their own portfolio, as was seen with their EVO acquisition and even that of Bungie, the developer behind Destiny 2. Tencent, on the other hand, has stakes in a variety of places, from Ubisoft to Riot Games.
Gibson had more to share, saying:
"Some studios will remain 100% while others will change (equity method or JV), will also look to explore to expand the studio portfolio."
Furthermore, the Crystal Dynamics and Eidos situation should grant them additional finances to help their endeavor - the current estimate being around USD $1.4 billion. This should prove handy in funding existing and future projects, or even expand further into new ventures.
A look at Square Enix's upcoming games
1) Final Fantasy XVI
The latest and greatest in Sqaure Enix's longrunning JRPG series, Final Fantasy XVI is their most ambitious game yet.
Set in the land of Valisthea, players must deal with the looming threat of the Blight. They will get to engage in Devil May Cry-inspired hack-and-slash battles when the game drops next year for PlayStation 5, and for PC later.
2) The DioField Chronicles
One of the newest Square Enix in a while, players will be able to navigate the Blue Foxes in strategic battles as the kingdom of Alletain finds itself stuck in conflict in the war between the Roosevelt-Schoevian Empire and the Rowetale Alliance.
The strategy RPG experience is quite reminiscent of games like Fire Emblem and XCOM. It will come to PlayStation 4, PlayStation 5, Xbox One, Xbox Series X|S, Nintendo Switch, and PC.
Another brand new IP, Harvestella is a hybrid between a life simulation and action RPG. With the deadly season of Quietus threatening all life, players will be able to cultivate new relationships with others as well as fight dangerous monsters in action-driven combat. It is similar to the underrated Rune Factory games, and will be coming to Nintendo Switch and PC.