SE sold "Eidos Montreal/Crystal Dynamics" because they thought their games would cannibalize sales of the rest of the company (!?)
- Thread starter Raigor
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Yeah, when I read the headline, my first thought was that instead of selling them because they cannibalize the rest, they did so because those studios were hemorrhaging their profits, especially considering the reception Marvel's Avengers got.
This sounds... suspicious.
I am gonna wait before reacting to this because them feeling the games cannibalize their funds is way bigger difference compared to the games cannibalizing their sales.
I am gonna wait before reacting to this because them feeling the games cannibalize their funds is way bigger difference compared to the games cannibalizing their sales.
Outriders i think is published by SE, they dont own the studio, i dont know the IP. But it looks like the studio didnt receive any royalties for it due to poor results.
Square Enid still owns Just Cause, Outriders, and Life is strange. They also said during Eidos sale they want new western studios. My guess is they want to co-finance the studios with another party.
www.videogameschronicle.com
A week after selling its Western studios, Square Enix says it will establish or buy new ones | VGC
The company further explained its reasoning behind the studio sales…
www.videogameschronicle.com
SE would blame their former western studios for everything. You wonder who was called first after FF14 had the server issues in the past. CD or Eidos? 😅😂 /s
Eidos cannot get away with this. Double agents/s.... Have they seen their own end of quarter without them?!
All jokes aside that has to be the explanation
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Yeah this is it, or at least what I thought when I read it. The studios they sold are making games that are breaking even or losing money at best and they are 'cannibalising' resources that could be used by a studio that will make games that return a profit.
They own the IP, yeah, it was one of the western IPs they maintained ownership over. There has been disputes with payment to the actual dev, but Square called it a success and said they considered it one of their new franchises not long after launch.
Ok, that would have more sense. They could be interested in buying something more aligned with their successful model,FFXIV, like Myhoyo along Tencent or another partner.Square Enid still owns Just Cause, Outriders, and Life is strange. They also said during Eidos sale they want new western studios. My guess is they want to co-finance the studios with another party.
A week after selling its Western studios, Square Enix says it will establish or buy new ones | VGC
The company further explained its reasoning behind the studio sales…
Square Enix do not seem like a bright bunch of people. Sounds like everyone involved is happy though. SE hated the studios and the studios hated SE. Super duper over-simplification but obviously they weren't willing to try to make things work any longer. It's a better outcome than just shutting the studios down. I feel like that would've happened if this was Sony/EA/MS.
Is this a translation thing?
My interpretation is SE's western studios were costly to run and is not selling that much higher than the cost.
If their costs balloons, they might eat into the revenue from their other studios (or rather getting a net loss which affects the bottom line)
My interpretation is SE's western studios were costly to run and is not selling that much higher than the cost.
If their costs balloons, they might eat into the revenue from their other studios (or rather getting a net loss which affects the bottom line)
This is a hell of a contrast from the Square that was dissatisfied when Tomb Raider 2013 sold "only" 3.4 million copies in its first month alone.
Imagine being SE and you have so many great games coming out at the same time that people can't choose what to buy.
(I'm pretty sure they mean turds like Avengers dimish the profits of the more successful games.)
(I'm pretty sure they mean turds like Avengers dimish the profits of the more successful games.)
They don't own either DONTNOD or Deck Nine, both are still independent. They do own the Life is Strange rights, of course.
... Have they seen their own end of quarter without them?!
And Forspoken was meant to arrive in the midst of this, but is 'only' delayed to January.
Kind of a weird statement considering the last few tweets. Maybe worded wrong but feels like it meant the studios were eating into their profits overall. That said, it still sounds like it was a good decision to do it either way.
View: https://twitter.com/gibbogame/status/1555397954977943553
View: https://twitter.com/gibbogame/status/1555397954977943553
"Improving capital efficiency" suggests that they want to make better buse of the money they're spending, hence cutting off CD/Eidos, which were costing them like 100 or 200 million per year.
Selling stakes probably mean selling shares to interested parties such as Tencent. I can't remember but does Saudi Arabia's Public Investment Fund owns a stake in Square Enix?
Selling stakes probably mean selling shares to interested parties such as Tencent. I can't remember but does Saudi Arabia's Public Investment Fund owns a stake in Square Enix?
Square Enix management is just on a whole different level. They're the galaxy brain overlords that us pea brained gamers need.
Makes sense especially with the imminent Taro cinematic universe on the way
can't be any worse than the supposed "90 Day Fiance Universe" WBD were touting today
Might sound wild on the surface, but their western portfolio is very much a different flavour to the majority of Square Enix's content.
Hell, this year alone I've bought (And will buy) Triangle Strategy, DioField Chronicle, Tactics Ogre, and Front Mission remaster when it comes out. Not to mention dipping my toes into their other projects, like that Valkyrie game, and the harvesting one.
Their western portfolio was high budget releases that occupy big launch windows, and required big sales. So not only would they compete with other western games, but also any/other games their Japanese division wanted to release. I think doubling down on their Japanese division, as well as going back to their roots of exploring the plethora of good IP's and just higher quality smaller releases is a lot better overall.
Don't get me wrong. I love the shit out of Eidos and Sqenix's western games, but the handling clearly showed it was not their forte, and games missed as much as they landed.
Hell, this year alone I've bought (And will buy) Triangle Strategy, DioField Chronicle, Tactics Ogre, and Front Mission remaster when it comes out. Not to mention dipping my toes into their other projects, like that Valkyrie game, and the harvesting one.
Their western portfolio was high budget releases that occupy big launch windows, and required big sales. So not only would they compete with other western games, but also any/other games their Japanese division wanted to release. I think doubling down on their Japanese division, as well as going back to their roots of exploring the plethora of good IP's and just higher quality smaller releases is a lot better overall.
Don't get me wrong. I love the shit out of Eidos and Sqenix's western games, but the handling clearly showed it was not their forte, and games missed as much as they landed.
Feels like the decision to sell was made more on political grounds than anything commercial at this point.
... Have they seen their own end of quarter without them?!
Square might be the dumbest company I swear. No a molecule of sense in their leadership.
that and they want to see if other buyers of "stakes" bite so whoever wants to buy (I am guessing Sony) has to pay more
Like others, I'm pretty sure this means something different that the "take" everybody ran with.
It's likely about resources & portfolio management, this sounds about right:
It's likely about resources & portfolio management, this sounds about right:
I've been told that some of the stuff they put out this year had actually been sitting a shelf for years.
I feel like Sony wouldn't be interested in just buying shares of studios. They'd likely want to own everything outright.
Maybe that is why others are involved/being potential investors like Tencent, Nexon. The idea would work with them who are fine with doing such.
Maybe that is why others are involved/being potential investors like Tencent, Nexon. The idea would work with them who are fine with doing such.
I think it's a marketing thing. People underestimate the cost and resource associated with marketing. Marketing IS important and does drive sales. And there's only so much money to spread around everything.
There have been pretty good examples of SE not putting enough marketing into titles and that impacting sales (NEO TWEWY for example). Or SE relying entirely on Nintendo to market their games.
So in short they're probably right. They don't have enough resource to market all these big titles, so games marketing budgets are being cannibalised, and that's impacting sales. It's not as simple as too many games.
I just assumed (hoped) that they were just shifting all their focus to every team making new things to clean in Powerwash Simulator.
So what's the new excuse going to be when the Embracer published titles all have the same issues?
The "Mismanagement"™ is coming from inside the house.
That, to me, is a reason to ice the underperforming IPs they were using - not the studios. Deus Ex or Tomb Raider are underperforming? Okay, put those teams on something else. Especially if the games are being well received.
The big money losers like Avengers that WEREN'T well received, were almost certainly fucked by decisions made above the studio, from executives who had live service and microtransaction dollar signs dancing in their heads.
Yoshida is a treasure they are lucky to have, but the rest of them... holy jumpin shitballs man. And sure enough Yoshida has protected FFXIV from excessive monetization, and shown a lack of enthusiasm for all of the NFT shit.
Maybe it was the only way they could off load their overpriced bay area studios, but I still can't get my head around selling the Tomb Raider for less than 300 million. Just find another studio that will make those games cheaper
Sony does buy the shares too though. Like their minor stakes in various companies. Not on the scale of Tencent though.
Not as much now though at least in terms of gaming studios. In the past they were fine with it more. I think the most recent one though in the present era is owning stock for Devolver but that was just to get Devolver a nudge for going public.
Also this line just screams want AAA resources and funding. Like other studios before they get acquired.
View: https://twitter.com/gibbogame/status/1555397401648644096
Wait, so is the last tweet his own interpretation or the conclusion Square came to?
Read 4 through 6 on that thread. This is about stakes in western studios as opposed to the cost structure they had with Eidos.
As soon as they sold Eidos they immediately announced they want to expand acquisitions of studios in the west
A week after selling its Western studios, Square Enix says it will establish or buy new ones | VGC
The company further explained its reasoning behind the studio sales…
www.videogameschronicle.com
It even states some studios would continue to be wholly owned by Square Enix Holdings. You tend not to buy companies while selling your existing company. This is basically square Enix saying it wants to invest in western titles but not own all the investment and risk.
So take a page from EA's playbook? Keep the IP, close the studios.
To me it sounds like them talking about giving more money to their Japan studios now that they sold their EU/US/NA studios.Read 4 through 6 on that thread. This is about stakes in western studios as opposed to the cost structure they had with Eidos.
As soon as they sold Eidos they immediately announced they want to expand acquisitions of studios in the west
A week after selling its Western studios, Square Enix says it will establish or buy new ones | VGC
The company further explained its reasoning behind the studio sales…
View: https://twitter.com/gibbogame/status/1555397706373140480
They won't have to funnel a ton of said money into AAA Western made games.
That is right because the idea is to set up western studios partially owned by Square Enix so that Square Enix doesn't have to fully fund western titles. They want to keep all or most Japanese studios fully owned and have partially owned western studios and IPs.
If they were selling Square Enix it wouldn't impact US and EU studios the most. It's also the fact that Square Enix has no remaining western studios. So the implication it would affect US/Western studios the most implies buying or creating new western studios.
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