Square Enix sells its western studios and hits such as Tomb Raider for $300m

The Japanese gaming company behind Final Fantasy is selling off three studios, including the rights to hit franchises including Tomb Raider, in a $300m (£240m) deal.

Tokyo-based Square Enix has sold US-headquartered Crystal Dynamics and Canada-based Eidos Montreal and Square Enix Montreal to the Nasdaq-listed Swedish gaming group Embracer.

The deal includes the intellectual property (IP) rights to games such as Tomb Raider, which has sold more than 88m units, Deus Ex, Thief and Legacy of Kain. It also includes 50 back catalogue games and will add 1,100 staff to Embracer, taking its global headcount to more than 14,000.

“We are thrilled to welcome these studios into the Embracer family,” said Lars Wingefors, co-founder and group chief executive at Embracer. “We recognise the fantastic IP, world class creative talent, and track record of excellence that have been demonstrated time and again over the past decades.”

Square Enix also has a multi-year deal with Disney to make Marvel games – to date it has made only two titles, Avengers and Guardians of the Galaxy – which is likely to be part of the deal but was not mentioned in the announcement.

Embracer, which has a market value of $7.2bn, has spent more than $8bn making over 60 acquisitions since 2020. The largest was the €2.75bn (£2.3bn) acquisition of French board game company Asmodee Games in December.

“Embracer is the best kept secret in gaming: a massive, decentralized collection of entrepreneurs whom we are thrilled to become a part of today,” said Phil Rogers, chief executive of Square Enix America and Europe. “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.”

The $300m price tag reflects “limited competition for acquisition of the assets, perhaps suggesting some post-pandemic softness in valuations for particular segments”, said Piers Harding-Rolls, head of games research at Ampere Analysis.

“Interest will be curtailed by the lack of live service expertise,” Harding-Rolls added, a reference to games that offer continuous, updated play. Titles such as Tomb Raider are primarily single player and top games in recent years can require investment comparable to big budget movie productions.

“In different timing and circumstances that could have been a different number but now we are where we are and I’m standing here, so I’m super pleased with that,” Wingefors told a briefing.


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