Why Square Enix will be a 'good' but not 'great' acquisition for PlayStation?

If rumors are anything to go by, PlayStation and Square Enix might be coming under the same umbrella. 2022 has been a year of acquisitions, with all the giants in the world of video games involved in potential deals.

The sequence might continue, or at least, the majority of the social media tends to think so. While PlayStation acquiring Square Enix could be a great deal, its potential value has gone down.

Square Enix has already been involved in a transaction recently with the Embracer Group as they have sold some studios and IPs they previously owned. While the deal has been done with some deeper planning, the recent transaction is precisely what reduces the value.

While Sony can still make a decent acquisition of the Japanese publishing house, the valuation has been reduced. This reduction isn't just in the sense of financial terms but content-wise as well.

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PlayStation's potential acquisition of Square Enix will have a lesser valuation than earlier

If PlayStation decides to acquire Square Enix, it will add value to its existing portfolio. The first name that comes to mind is the Final Fantasy franchise. Sony already has a strong stake in it, with recent games being console exclusive.

Acquiring Square Enix, for starters, will allow them to not get into any deals anymore as they will be the direct owners. While Square has struggled with Western productions, its Japanese outlet has stayed strong, although games like Balan Wonderworlds have caused a loss of reputation.

As for PlayStation, they will have the opportunity to get a deal for cheaper valuations. It's easier to acquire something when its financial valuation goes down.

With a deal, Sony will also be able to add to their already enviable list of first-party studios. With franchises like Final Fantasy, they will be able to churn out better quality and take it to the next level.

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Why will any deal now be less the optimum?

Incidentally, Square has consistently spoken about its troubles with western releases.

Earlier in 2022, the company stated that Guardians of the Galaxy sales hadn't satisfied them. This follows a long list of western releases like Deus Ex games that haven't met the publishers' expectations.

This is perhaps the biggest reason Square Enix has sold its western divisions to the Embracer Group. While this makes it easier for an acquisition, there are some amazing IPs that Sony could have profited from.

IPs like the Tomb Raider and Deus Ex are two of the many that PlayStation could have made projects for in the future. Tomb Raider, for example, has a new game in the making using the Unreal Engine 5.

Sony also has a partnership with Epic Games, and they could have utilized the new generation powers of Unreal Engine 5 in this case.

One strong belief from many ends is that the Embracer Group is getting an absolute bargain. They're getting three western studios, one of which is the renowned Eidos Montreal.

Had the studios been the only thing being sold, there would still have been a good amount of value.

It's also unlikely that Sony and PlayStation's visions are towards NFTs and blockchains. Earlier in their statement, Square Enix declared that they would want to invest in future technologies based on blockchain and cloud gaming.

Overall, the sales of IPs and future goals of Square are something that won't possibly appear as something attractive to Sony.

Visions can, of course, change as companies shift their goals from time to time. But there's no denying that any possible value from a potential deal has now been reduced.