“It was sold too cheaply.” vs “It’s an appropriate price.”
Square Enix sold more than 50 IPs and studios to the Swedish Embracer Group for $ 300 million. As a result, the industry and gamers are evaluating the conflict over whether the transaction was appropriate.
The claim that it is too cheap says that the value of popular IPs such as Tomb Raider, which was sold together, and the potential of three studios are undervalued. On the other hand, the rebuttal side is relatively small, but it is said that the three companies’ recent results can be convinced of Square Enix’s decision. We looked at the basis of both claims.
“It’s not a bundle product… ”
Summoned as a direct comparison for the sale decision was the acquisition of Sony’s Insum Niak Games (Insum Niak), which was made on a similar scale in 2019. Sony’s Insumniak acquisition contract is known to have been successful at about $ 229 million.
This is regarded as a successful deal from Sony. At that time, Insomniak was after he succeeded in Marvel Spider -Man, and he has built his skills and reputation for a long time by creating the Ratchet & Clank series for a long time.
In addition, at that point, the production cost of the triple A game title has already been paid for tens of billions. Therefore, it is evaluated that 271.1 billion won is not damaged at the cost of placing a developer such as Insomniaak.
This time, Square Enix sold three studios for 380 billion won, not a single studio, ‘Crystal Dynamics’, ‘Aidos Montreal’ and ‘Square Enix Montreal’.
The three companies are considered to be the size of the human size. According to the announcement, the employees of these studios total more than 1,100. In addition, it is also worth noting that they are studios with “stars” as much as Insomniak, but they all have a solid portfolio.
Crystal Dynamics was criticized for successfully reviving the IP through the 2013 Tomb Radar Reboot. Aidos Montreal’s Days X: Human Revolution and Marvel Guardians of the Galaxy are also well -received titles. Square Enix Montreal’s mobile versions of Tomb Radar, Hitman, and Diaes X are also well harmonized with the original charm and casuality.
It is also considered that not only these studios but also 50 unique IPs were sold together. Among them are famous IPs such as Tomb Raider, which was popular outside the game world. The Days X is also a series of enthusiasts. The Embracer Group, which took over, directly said that these two IPs were “seeing investment opportunities.”
Meanwhile, some have interpreted that Square Enix has put ‘irrational number’ for the blockchain business in the future. In response to the decision to sell, Square Enix announced that it will provide opportunities for new business developments by investing in areas such as blockchain, AI, and cloud.
“It might have been a good dog. ”
There is also a view that the contract is not “surprise.” Daniel Amad, an Asian game industry expert, claims that it was a reasonable deal for Square Enix.
He pointed out that the first Western studios have not been able to achieve this performance for a while. In fact, three studios have been launched in the last five years,
This is also revealed in the company’s earnings. Amad said, “Crystal Dynamics’ net profit margin is 3.6%in 2021 and 0.65%for Aidos Montreal. On the other hand, Square Enix’s company -wide net profit margin is 14.2%. ”
Square Enix’s responsibility for this sales is the mobile and MMO title of Japanese studios. In terms of perspective, there is no room to interpret the three studios that were sold. The sale of three studios to secure liquidity can be a better decision for Square Enix.
This is an interpretation of Square Enix’s own background. Square Enix said, “It is to increase corporate value by accelerating the growth of core businesses in the digital entertainment sector through more efficient resource allocation in line with changes in the international business environment.”
“In addition, this sale will provide more opportunities to meet the overseas publishing function of the organization in Tokyo, and renew the current operating structure and related reporting system. In addition, it will strengthen its integrated organizational management capabilities in line with the purpose of maximizing profits in the global market through the launch of new Japanese and overseas studios. ”